After an extremely disappointing debut, Bakkt – the trading platform designed for institutional investors – is exploding in use, with the number of bitcoin futures contracts being traded having exploded by roughly 800 percent.
Bakkt: A Late Start Leads to Massive Jumps
Bakkt was first introduced last year. Many claimed it would bring a whole new level of mainstream use and legitimacy to the cryptocurrency space, as it was designed for institutional traders and retailers who were curious about potentially accepting crypto as a means of payment.
Unfortunately, several delays got in the way of Bakkt’s release, which stopped it from being released until late September of this year. By then, it appears some of the hype and excitement ultimately died down because Bakkt opened its doors to mixed reception and traded less than 75 bitcoin futures contracts within the first 24 hours of business.
Many thought the platform was dead before it even arrived. Following the lack of positive reception, a crypto bloodbath occurred that caused currencies like bitcoin to lose more than $1,000 in just a matter of minutes. Several other mainstream cryptocurrencies followed suit, with tokens like ether dropping from the $190 range to about $157. Massive falls were recorded, and there was no answer regarding how to bring things back up.
Now, however, it appears Bakkt is suddenly catching on. The Intercontinental Exchange (ICO), which serves as the parent platform of Bakkt, reports that trading has increased by a whopping 796 percent over the past few days, meaning that perhaps institutional players are intrigued by crypto after all – they just needed a little reassurance first.
In a message posted on Twitter, Bakkt explained:
As we continue to build the Bakkt bitcoin futures contract, we reached a new trading record of 212 contracts traded [on Wednesday]. With [Wednesday’s] close, Bakkt set a new daily record of $1.93 million, bringing its total number of outstanding contracts to 1197 as of October 9, worth $10.2.
While bitcoin futures trading did fall back to roughly 109 contracts on Thursday, many analysts are seeing this as a positive sign, suggesting that institutional trader activity is about to make a huge surge. Tom Lee of Fundstrat fame, for example, commented:
Watch Bakkt volumes. It is nearly a pure proxy for institutional demand for bitcoin.
So, Will the Industry Still Strengthen?
It has widely been said that institutional activity would ultimately make the crypto space legitimate. It’s hard to say if this is on the verge of becoming a reality over the next few months, but already many forms of crypto are beginning to initiate comebacks. Bitcoin nearly rose to $8,600 on Thursday, but ultimately fell back to around $8,300 at press time.
Bakkt boasts the support of several chains including software giant Microsoft and the Seattle-based coffee king Starbucks.