The long awaited Bakkt Bitcoin futures contracts went live a few hours ago but the response so far has been underwhelming. Bitcoin briefly topped out over $10k but has failed to hold that level as trading in Asia got underway.
8 BTC Traded So Far
The Bakkt daily and monthly physically settled Bitcoin futures contracts went live for trading a few hours ago but there was no big fanfare or market reaction. The first trade was executed at just past 8pm ET for $10,115.
The first Bakkt Bitcoin Futures trade was executed at 8:02pm ET at a price of $10,115
— Bakkt (@Bakkt) September 23, 2019
At the time of writing only 8 BTC had been traded on the monthly futures contracts.
However, this could be seen as a positive development since it is around one BTC per hour which, if continued at this rate, could be a monumental amount traded over the month.
Industry analysts have pointed out how important Bakkt is being physically delivered as opposed to other contracts which are settled in fiat.
“Reminder, the hype is bakkt with substance. Unlike other futures exchanges, this is settled in bitcoin. Actual bitcoin is paid out, not just the fiat equivalent to the price of bitcoin. The result is better price discovery and liquidity for bitcoin.”
@Bakkt is officially live!
Reminder, the hype is bakkt with substance.
Unlike other futures exchanges, this is settled in bitcoin. Actual bitcoin is paid out, not just the fiat equivalent to the price of bitcoin.
The result is better price discovery and liquidity for bitcoin.
— Rhythm (@Rhythmtrader) September 23, 2019
It is too early to tell whether these predictions hold value. When contracts start closing and BTC is getting paid out things are likely to start moving on markets. Institutional investors may not want to hold the physical Bitcoin for fear of its volatility; this is why they prefer futures in the first place.
Bitcoin Market Reaction
A brief spike coincided with the launch a few hours ago when BTC lifted off its intraday low of $9,850 to top out at $10,080 momentarily. It remained above the five figure barrier for a few hours before starting to slide back again.
There has been no big pump but that was largely expected as those getting into the new futures would have already allocated their investments and been on boarded. Trader ‘Cantering Clark’ pointed out;
“BAKKT is essentially recycled liquidity quoted from retail venues. This is the opposite of the normal liquidity profiles of traditional markets. Now ask yourself, why would $BTC price have jumped upon BAKKT opening? Those interested are likely already involved.”
At the time of writing Bitcoin had dropped back into four figures and was trading around $9,970. The rest of the crypto market is in the red as altcoins extend their weekend losses.