First Week of Bakkt: Slow Start Unlikely to Dampen Long-Term Prospects

After more than a year spent ensuring full compliance with the United States authorities, Bakkt, the first federally regulated platform for Bitcoin futures trading, launched on September 23.Conceived by the global trading giant Intercontinental Exchange and counting a solid portfolio of investors from Microsoft's venture fund M12 to Starbucks as its backers, Bakkt offers institutional traders something brand new.

Unlike the Chicago Mercantile Exchange Bitcoin futures contracts that have been on the market since December 2017, the idea behind Bakkt is to create an instrument that would settle in actual Bitcoin upon liquidation.

On the day of its launch, Bakkt offered traders two types of derivatives: daily contracts, whose buyers receive their Bitcoin at the end of the same day - almost as if trading on a spot exchange - and monthly contracts, which ICE management hopes to be instrumental in longer-term BTC price discovery.

Unimpressive debutAmid overall high expectations further fueled by crypto Twitter and media hype, Bakkt failed to impress on the first day of trading, with a paltry 71 contracts sold and the volume picking up slowly in the following days.

Others pointed out the glaring difference between Bakkt's 71 first-day deals and CME's 5298 trades in the first 24 hours.

"Since the launch of Bakkt Bitcoin futures, the intraday volume has stayed between 70 to 100 BTC which is small when compared to BitMEX, an unregulated exchange, with more than 270,000 BTC intraday volume on September 23rd 2019.

Most of the experts who have spoken to Cointelegraph on this matter agree that, given this retail-driven character of crypto trading, it is unlikely that institution-oriented ventures like Bakkt will be exerting significant influence on the overall BTC market in the near future.

Brave New Coin's Fran Strajnar was also willing to give Bakkt more time to prove its worth as Bakkt is likely to evolve into a gateway that will capture today's suppressed demand for crypto trading vehicles within the institutional investment space.

It's too early to conclude that Bakkt is a failed product based on tepid demand in its first few days of trading.

Most industry experts were also willing to commend Bakkt for bringing a unique product to the market, which, in Tom Maxon's words, is a "bold step towards the future of Bitcoin products.