What are those new financial tools? Those would be the well-known financial risk management tools known as futures and options. On September 23rd, Bakkt began its first day of trading crypto futures based on Bitcoin. Here is the link to those initial results via the DailyHODL. Although its first day of trading disappointed traders, which led to a substantial swoon in cryptocurrency prices, its volume had gradually begun to increase in the month since its launch. The following graph represents the volume history as of last week:
NewsBTC analyzed the historical price movements, confirming its monumental status. After this weekend’s epic bitcoin moon, the Bakkt volume chart that @BakktBot regularly tweets out looks just a wee bit different. Take a look:
What was the previous high on October 9, 2019 was exceeded each of the 3 days leading up to the expiration of CME futures contracts. On the historic day, Bakkt volume exceeded its previous high by more than 5-fold by printing $10.3 million worth of volume on October 25, 2019.
Much of the media associated bticoin’s gain with policy announcements out of China. We at Konstellation firmly believe that China is the lynchpin for blockchain development in financial services (Our CEO Sang Lee even talked about this in a recent video!). But we do not believe that one stump speech by Xi explains the entire reasoning behind a $3000-plus move in BTC. There is definitely more to this story, as we explained this weekend on the Konstellation Linkedin account using the following graph as evidence.
For sure, the nascent bitcoin trading products market has an extremely bright future. Bakkt entered this exciting new market with backing from more traditional players like Microsoft, Boston Consulting Group, Intercontinental Exchange, and Naspers. We also recently saw the launch of Binance Futures to add to the nimble crypto startups already in the derivatives space like CoinFLEX, FTX, Deribit and BitMEX.