Bakkt launched its much-awaited Bitcoin futures contracts on 23rd September, but contrary to general belief it did not sell as many contracts as it was hyped to. In fact, the sales remained slow for the one month where many started doubting whether Bakkt would ever meet the hype it created before the launch. Even in October, the daily trading volume did not cross the $2 million mark.
Many analysts had predicted that lower sales should not be a cause of worry as the market would pick up once it matures. The predictions came true as Bakkt made significant progress in November including an all-time-high daily sales record of $15 million when 1,756 bitcoins changed hands.
The surge in trading volumes should not be seen as the sign of maturity which the analysts were talking about, as even at its current liquidity Bakkt is far below the exchanges which offer spot trading. Charles Phan, CTO of crypto-derivatives exchange Interdax explained,
“Bakkt’s growing liquidity is a positive sign but it is still a far-flung dream before it becomes a venue that dictates Bitcoin’s price action or has a significant influence on it,”
“In comparison [to crypto trading volumes at spot trading exchanges], $15.5 million can be anywhere between 10 times to 100 times smaller than the volume of the dominant cryptocurrency exchange.”
The surge in trading volumes of the Bitcoin futures contract is being attributed to the increased spot price of Bitcoin after the prolonged winter. Phan believed as we move towards a stable market and hopefully a bull run, the demand for Bitcoin futures contract will only rise.
Bakkt could become the preferred platform for the Bitcoin derivatives market
While Bakkt's bitcoin futures volume is on the rise, its competitor CME has seen a decline in future contracts volume. Many experts believe that Bakkt has the potential and opportunity to become the leaders of the derivative market because of its low trading fees and increasing liquidity.
Bakkt has also announced the launch of its Bitcoin Options on December 9th. With programs like liquidity incentive which might lower the trading fee further, Bakkt has the opportunity to become the market leaders. Phan explained how Bakkt can take the lead,
“Large traders might shift over from other venues to Bakkt and take advantage of the lower fees and provide more liquidity.”