Bakkt Sets New Record as Volumes Pick Up on Growing Volatility

Bakkt interest surges, but it remains to be seen if it is real BTC adoption, or a chance at speculation.

TheBakkt monthly futurespeaked to another record volume, as Bitcoin (BTC) returned to short-term volatility and moved by hundreds of dollars a day. Bakkt volumes coincide with days of heightened activity on the BTC futures markets, as well as the spot markets.

The Bakkt exchange also goes through a series of records, peaking again just after establishing a daily trade of above 3,150 contracts. The next day saw even greater activity, surpassing 5,000 contracts.

https://twitter.com/BakktBot/status/1199951594701434880

The current futures market not only has record BTC contracts traded, but also record open interest. The next expiry date for futures is December 2019, and at this point it is uncertain if physical delivery would be taken, or the futures would be rolled to the next contract.

Despite the potential for physical delivery, social media comments focus on the perception that Bakkt is trading only the dollar value of BTC, but not actual BTC. Options on futures would further remove the need to get exposure to actual BTC.

Instead of inviting institutions to own BTC, futures markets open the door for dollar inflows to sway the price, but not lead to actual purchases of the coin. At the same time, “whales” are capable of moving the spot market.

BTC traded at $7,576.29 on Thursday, with Bakkt prices climbing to $5,760. Spot market volumes still exceeded those on the Bakkt exchange, reaching above $23 billion. But the heightened volatility does not frighten futures investors.

https://twitter.com/CatoshiMeow/status/1198729565188841479

The effect of Bakkt futures may reestablish a new mechanism for BTC prices, especially based on gaps in futures valuation. The spot market and scarcity narrative may give way to pure dollar-based speculation.

In this scenario, even with the halving, there will be no scarcity of BTC to trade, as futures markets in a way “print BTC” and allow for speculation without real demand for the asset.