The very disappointing first day trading volume for Bakkt’s physically settled Bitcoin futures (which launched on September 23) is helping to keep the Bitcoin (BTC) price below $10,000.

Bakkt, the crypto custodian and crypto derivatives exchange subsidiary of Intercontinental Exchange (ICE), the operator of the New York Stock Exchange (NYSE), launched trading in its highly-anticipated physically-delivered Bitcoin futures at 00:00 UTC on Monday (23 September 2019).

Bakkt’s Bitcoin (USD) Daily Futures Contract and Bitcoin (USD) Monthly Futures Contract are traded on ICE Futures U.S., and they are cleared by ICE Clear U.S.

Although many expected the launch of Bakkt’s Bitcoin futures to act as a positive catalyst for Bitcoin by driving institutional adoption of Bitcoin, the fact that only 71 monthly Bitcoin futures contracts and one daily Bitcoin futures contract were traded on launch day seems to have disappointed many players in the market. 

According to data from CryptoCompare, when trading in Bakkt’s Bitcoin monthly futures went live, i.e. at 00:00 UTC on September 23, Bitcoin was trading at $10,011. Within one hour of the start of trading, the BTC price had fallen below $10K to $9,992, and it has remained below $10K ever since that time:

BTC-USD 2 Week Chart - 24 Sep 2019.png

In fact, in the past 24-hour period, the Bitcoin price has dropped another 1.73%, and at press time, BTC-USD is hovering around the $9,750 mark:

BTC-USD 24 Hour Chart - 24 Sep 2019.png

There are essentially two ways to look at this launch.

The “glass half empty” camp would argue that the Bakkt Bitcoin futures launch was a flop since when CME launched its cash-settled Bitcoin futures in December 2017, its first trading volume was 5298 BTC as opposed to 72 BTC for Bakkt, i.e. over 73 times higher. 

The “glass half full” launch, on the other, would say that for the first time in the U.S., we now have for the first time a fully-regulated platform for Bitcoin custody and trading of physically-settled Bitcoin futures, that the success/failure of this new platform should not be judged on the basis of its first day performance, and that it is very likely that institutional investors will gradually start using Bakkt, especially for accumulation of Bitcoin rather than just exposure to Bitcoin (which they have been able to get since December 2017 via CME Group’s cash-settled Bitcoin futures).

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