Well, after yesterday’s crypto bloodbath, probably the biggest thing enthusiasts and traders are asking themselves is, “What the heck could have made bitcoin and its altcoin cousins fall so badly like that?”
Bitcoin and Crypto Falls Heavily
Bitcoin, with virtually no signs whatsoever, lost more than $1,000 in just a matter of minutes, falling from about $9,480 at this time yesterday to roughly $8,110. By the mid-afternoon, the currency had jumped back up to $8,600, but at press time, it has fallen back down to approximately $8,410, so the coin is still meandering through swampy terrain.
Of course, bitcoin wasn’t alone. The entire crypto scene turned red as every major coin, both large and small, began to bleed out like wounded soldiers on a battlefield. Ethereum, for example, fell more than 15 percent and dropped from about $190 to $157. XRP fell to about 23 cents per unit, and Litecoin would end the day trading in the high $50 range after spending time at $65 earlier in the day.
So, what happened? What could make the crypto space fall so dramatically in such a short space? One thing could have been the introduction of Bakkt. Officially launching last Sunday, the platform is designed to give both retailers and institutional players easier access to crypto. Some sources claim that the platform’s introduction to investors was “strong,” but if you look at the stats, one can easily see that Bakkt’s debut was less than stellar.
Within the first hour of Bakkt’s arrival on the crypto scene, only five futures contracts were traded. Within ten hours, the number only rose to 28. It’s clear that institutional players are still worried when it comes to crypto. Thus, Bakkt hasn’t had the reception many of us thought it would have.
What Else Could Have Caused This?
Still, spokesmen for the platform are suggesting that “strong participation” occurred during Bakkt’s first official night in business. A statement by one such spokesman reads:
On the first day of trading on ICE Futures U.S., there was strong industry participation in Bakkt Bitcoin Futures and the [October 2019] monthly contract had the tightest bid-offer spreads in the market, which was an exciting achievement. As the only end-to-end regulated market for digital assets, Bakkt Bitcoin Futures will play a key role in bringing greater price discovery and risk management to the bitcoin market.
Another source suggests that the fall of bitcoin may have something to do with margin calls that occurred at Bitmex, a cryptocurrency exchange based in the nation of Seychelles in Africa. Several long trades seem to have occurred over the past 48 hours, in which customers that held a lot of crypto felt the need to sell to potentially lessen their chances at loss. Large sells like these could have taken the market in a nasty direction.