The Bakkt platform launched the platform that had many hopes that it would soar in the value of Bitcoin, as the platform would provide services for selling Bitcoin futures contracts and was backed by the same entity that runs the New York Stock Exchange (ICE).

But it disappointed hopes and suspicions, and some analysts even attributed it to being the reason for the collapse of the bitcoin price under 10 thousand dollars:

JPMorgan Analyst: Bakkt is the reason for the bitcoin price drop

The disappointment that accompanied the launch of the platform is not due to the lack of direct impact on the price of Bitcoin but rather the volume of what was traded on the first day.

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But after days of horizontal movement that dominates the daily trading volume

The trading volume did appear to be alive the day before yesterday, as the percentage is up 796% over the previous day’s figures.

An average of 224 monthly Bitcoin contracts were traded on Bakkt on Wednesday (a new record), compared to 25 contracts traded the day before.

However, the rise that occurred was short-lived.

The trading volumes then quickly dropped and reached their lowest level yesterday morning US time before starting to rise again.

Currently 80 Bitcoin futures contracts are traded.

Christopher Fan, chief technology officer of Interdax, a crypto derivatives trading platform, said that traders were reacting to the news about the Bitcoin benchmark provided by Bitwise. and rejected by the SEC.

It is also possible that market makers have a role in transferring funds across the platforms.

In this regard, Christopher said:

“When a person trades with market makers on a single platform, the market maker may also hedge the platform, thus transferring the related volumes to each other across the platforms.”

Fan explained that the Bakkt platform was benefiting from the market maker’s activity because it received funds from traders after the SEC announced its rejection of the Bitwise ETF.

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Returning the trading volume on Bakkt to its normal size is not in favor of the platform that has a big name and it looks like a number like 139 contracts per day (each contract represents one bitcoin) meaning 139 Bitcoin units are traded on the Bakkt platform on a daily basis, which is a small number.

While rival Bakkt, the CME group, has seen monthly volumes of Bitcoin futures contracts on the Chicago Stock Exchange reach an all-time high in July 2019.

The wide disparity between the trading volumes of the two platforms was sharply defined last Wednesday.

Where investors traded on the “CME” platform, an average of 5,212 contracts

Knowing that the contract size was set at 5 BTC per contract, which means that an average of 26,060 BTC was traded

Compared to Bakkt, which traded 224 bitcoins (its new record).

Why does the Bakkt platform suffer from low trading volume?

The flow of bitcoin trader funds towards CME is generally interpreted as an indication that institutional investors are comfortable with bitcoin futures.

But their reservations about Bakkt, which works in the same way, seems puzzling.

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Some argue that this may be due to the fact that the Bakkt contracts have already been settled.

Meaning that traders receive bitcoins at the end of the contract on Bakkt, while on the CME platform, the contracts are settled in cash, which means that traders receive cash equivalent to the price of bitcoin when the contract expires.

stated Mr. Vibhav Kadekar, Founder and CEO of CloseCross, a decentralized market forecasting platform, says:

Cash settlement is more attractive to the speculative investor who invests more for cash gain.

Given that these types of bitcoin contracts tend to attract more speculative investors, there will be a higher demand for cash-settled contracts.

While Matty Greenspan, one of the market analysts at the “eToro” platform, said the following:

It seems to me that Wall Street still does not understand the concept of “stable bitcoin futures” very well.

He adds:

One of the most important attractions of Bakkt contracts is that you can own Bitcoin, which is one of the rare assets whose value has increased significantly recently, after the contract expires.

Is time enough to balance the numbers to become the same size as the name “Bact”?

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