The first-week trading volume of the Bitcoin futures exchange Bakkt that launched amid high expectations, stood at $5 million. Five daily futures contracts with one-day maturity were not signed, according to a report by Coindesk.
Bakkt officially launched the Bitcoin futures contract on 23rd, citing its vision of a new market for digital assets. The total number of transactions over the next week came to 623. On the day of the launch, Bakkt simultaneously introduced a daily futures contract that expires the next day. And a monthly futures contract that expires the following month.
Bakkt’s futures contract is a contract that receives one Bitcoin per case. Therefore, considering the current Bitcoin market price of $8,300 per unit, the total trading volume is slightly over $5 million.
The bag volume is very low, if compared to 4,099 daily transactions on the Chicago Mercantile Exchange on September 27. Because CME’s futures contract is for five Bitcoin per case, the daily trading volume on September 27 alone amounts to as much as $165 million.
Five daily future contracts for Bakkt’s first week: is it helpless?
Bakkt introduced Bitcoin futures contracts targeting institutional investors, claiming to be a new milestone for the cryptocurrency industry. As a result, big institutional investors have been delaying the purchase of digital assets such as Bitcoin, waiting for the release of the bag.
Bakkt expected the newly launched futures contract products to draw considerable attention from large institutional investors such as hedge funds and asset managers. This is because futures buyers receive Bitcoin, not cash, upon expiration. Bakkt cited this in-kind settlement scheme as the most important advantage for investors who want to protect their assets.
In contrast, CME’s futures contracts are popular with individual investors by settling the difference between Bitcoin prices and contract prices in cash at maturity.
Experts say it is too early to jump to a conclusion, predicting that the volume of Bakkt’s transactions will gradually increase.
“There are a lot of exchanges in the market right now that can buy and sell Bitcoin, but it’s too early to jump to a new attempt by Bakkt,” said Dave Weisberger, CEO of CoinRoutes. Coinroutes is a New York-based company by Citigroup and Morgan Stanley-based investment specialist Weisberger. It helps cryptocurrency investors trade on various platforms.
“It takes some time for investors to move the bourse unless there is a cost problem or liquidity problem. Therefore, we can’t jump to judge the outlook for the bag.”
Damon Rebel, a spokesman for InterContinental Exchange, expressed a similar view.
“We can`t say that Bakkt`s performance in the first week is anything but low. It seems that participation of markets is active. Bakkt’s futures contract, which is gradually maturing as it enters its second week, has little commission. This alone is a significant achievement.”
