Bakkt’s physical futures contracts on Bitcoin were one of the biggest disappointments of 2019. After, despite the great expectations created around these financial products, they were practically ignored by institutional investors. However, now and in the middle of a new bullish rally in the price of Bitcoin, interest in Bakkt’s future contracts is increasing.
Bakkt sees a new record in the volume of Bitcoin futures
For much of 2019, Bakkt’s physical Bitcoin futures contracts were presented as a disruptive product for the crypto market. For the first time, a future contract approved by the U.S. regulatory authorities would allow payments at maturity to be made directly to Bitcoins rather than in fiat money.
This would allow large institutional investors in the U.S. stock market to invest directly in crypto currencies in a legal manner. This was expected to lead to billions of dollars entering the Bitcoin market through Bakkt futures contracts.
However, the reality was far from the expectations. For, shortly after its launch, the Bakkt physical futures market ended with minimal trading volumes. It was largely ignored by large institutional investors. They only began to enter the crypt-currency market, with products such as the Bitcoin and Grayscale Ethereum investment funds.
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The return of Bakkt’s future contracts
Now, this situation seems to be starting to change. So, in the midst of the new increase in Bitcoin’s price experienced in the last few weeks. And in the face of the increased interest of institutional investors in crypto-currencies, partly thanks to the influence of Grayscale, and partly due to the economic crisis generated by the Coronavirus. Bakkt’s Bitcoin Future contracts are starting to receive more attention.
Thus, as the company’s President, Adam White, commented in an interview. The volume of transactions in the Bakkt futures market reached a new record on Tuesday. When it reached $134 million, it left behind its previous high of $132 million reached on July 28.
In this way, and although Bakkt would still be far behind other future contract exchanges on Bitcoin as CME Group. For White, his company has the advantage of having a physical product based in the United States. This makes it attractive for those who want to enter the crypto market with the security provided by the US justice system.
For his part, when talking about the low transaction volumes in Bakkt options White assured that the company is not worried about them, since, for Bakkt, the race for the market of Bitcoin derivatives would just be starting.