Bakkt Figures Shows A Growing Institutional Interest In Bitcoin Futures Contracts


It seems that the now-infamous China pump of 2019 has awoken something in Bakkt’s Bitcoin futures. Recent figures reveal that institutional interest in Bitcoin is on the rise.

November 5, 2019, | AtoZ MarketsOn the day of the jaw-dropping 42% pump last week, the exchange’s futures saw more than $10 million worth of volume traded, a new all-time high for the fledgling market.

Institutional Appetite for Bitcoin Futures Contracts Grows

Institutional interest, however, cannot be conclusively pinned to the news that Chinese President Xi Jinping had endorsed blockchain technologies. This is because the value has kept rising since then.

Institutional interest in CME Futures increased from 2,873 contracts in Q3 2018 to 5169 open contracts as of Nov. 4. Meanwhile, long BTC futures have had a tough time in the past 3 months.  It started at 180 contracts at the beginning of August and peaked at 805 contracts in September.  This is because Bitcoin price nosedived below $10,000 from its July highs.

Whilst the price of Bitcoin struggled through September to surpass the $10k resistance level,  institutional interest in futures diminished.

This resulted in long contracts turning shorts. For instance, the number of OI on BTC longs declined to 290 BTC on September 24. Nevertheless, institutional interest was rekindled in the month of October as the value of long Bitcoin futures open interest on CME grew by 450%. BTC spot price volatility dropped to 6-month lows of 2% on October 22.

What is more, both Bakkt and CME platforms have seen a significant increase in demand from institutional entities in the first five days of November. Bakkt is finally showing signals of success as it has reached almost $10 million in daily trades for physically settled BTC futures.

Bakkt Records All-Time High Open Interest

It isn’t only CME’s market that is signaling increased institutional interest. Data from Skew reveals that  Bakkt futures open interest recorded its highest value on November 1.  Bakkt futures reached $1.26 million while the daily volume traded at $5.76 million.

ICE CEO Optimistic About Bakkt’s

Bakkt’s strong week comes as the chief executive of the Intercontinental Exchange (ICE), the firm behind the New York Stock Exchange and much of the crypto upstart’s operations, made an optimistic comment.

In the financial institution’s latest earnings call, the chairman of ICE Jeffrey Sprecher noted in response to a question regarding Bakkt that there is high institutional demand for Bitcoin derivatives products, as that is a way to gain exposure to Bitcoin in a way that is compliant with U.S. regulators:

“All [kinds] of financial institutions are talking to us and looking at this and trying to figure out where this fits and what the global regulators are going to think about this and so on and so forth. So there’s a tremendous amount of dialogue around it.”

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