Has the Bakkt crypto platform met the expectations of investors? Understanding the issue

CONTENT

  • Platform trading volumes lag behind competitors

  • The site is trying to generate interest in itself through advertising

  • Some Bakkt tools are not in demand at all

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The Bakkt crypto platform recorded a record trading volume for bitcoin futures. The indicator, according to the official blog of the project, stopped at 15,955 bitcoins (BTC) (about $ 173 million). At the same time, the Bakkt trading bot recorded a maximum at an altitude of 17,745 BTC (about $ 192 million). 

As a reminder, trading in Bitcoin futures at Bakkt started on September 23, 2019. Prior to this, the platform team postponed the launch several times. It is noteworthy that against the background of news about changes in the start date, the bitcoin rate has repeatedly fallen. An example is BTC’s reactions to the statement by Bakkt’s parent company, Intercontinental Exchange (ICE), at the end of November 2018 to postpone the launch of the crypto platform to 2019:

Data: TradingView

The reason for such a reaction to statements about the postponement of the launch date could be the high expectations of the participants in the crypto industry from the start of the platform. Many users were confident that with the launch of Bakkt, institutional investors would come to the digital asset market. The logic was as follows: the trading platform opens up an opportunity for a designated market segment to invest in cryptocurrency in a regulated market. At the same time, unlike competitors, Bakkt bitcoin futures are deliverable. This means that investors can receive payments in cryptocurrency, not US dollars..

Contrary to expectations, Bakkt’s start was not as bright. Against the background of the launch of the platform, the bitcoin rate went down. Many market participants, including analysts at JPMorgan, linked negative BTC performance with unjustified hopes for Bakkt. 

The moment of launching the crypto platform. Data: TradingView

A month later, Bakkt was still in dire straits. Despite a blurry start, in the fall of 2019, the indicators of the crypto platform still began to grow slowly. Bakkt’s positive movement in trading volumes throughout the year was also driven by investor interest in bitcoin.

In parallel, representatives of the crypto platform began work on new products. One of Bakkt’s goals was to create a unified digital payment platform. Some of the company’s initiatives found a response among market participants. For example, in March 2020, the initiative of the project – the Bakkt Cash payment service – was supported by the American coffee chain Starbucks.

Against the background of small, but still, success, the company left its CEO – Kelly Loeffler. She preferred the Senator’s chair to Bakkt. It is noteworthy that after Loeffler left the company, she was accused of insider trading. During 2020, the crypto platform experienced another CEO change. In April, David Clifton took over. He replaced Mike Blandin. The latter served as CEO after Kelly Loeffler left.

Despite changes in the staff and the lack of a large demand for financial instruments, the Bakkt team continued to try to interest institutional investors in investing in cryptocurrency.

What’s with Bakkt?

As of this writing, users are most interested in physically delivered Bakkt Bitcoin futures. Statistics indicate an increase in open interest and the volume of transactions with a financial instrument in mid-September. 

Data: SKEW

Despite the positive dynamics of the trading volume of Bitcoin futures on Bakkt, the platform is far from the market leaders. 

Has the Bakkt crypto platform met the expectations of investors? Understanding the issue

Data: SKEW

Read also: Bakkt Bitcoin futures will not be able to compete with BitMEX and here’s why

Bakkt Bitcoin options, judging by zero open interest indicators, turned out to be completely unclaimed in the market.

Data: SKEW

That being said, the Bakkt team is still trying to attract the attention of investors. To do this, representatives of the project launched an advertisement in the summer of 2020, which caused a lot of questions from the participants of the crypto community. Many considered it unsuccessful. Analyst of The Block Larry Cermak, in turn, expressed the opinion that the behavior of the Bakkt team speaks of the company’s distance from the digital asset market..

Bakkt is barely involved in cryptocurrency anymore. It’s a good ad in the sense that I’ve already seen it like 10 times organically posted on Twitter by people wondering wtf they’re trying to say. That doesn’t happen often

– Larry Cermak (@lawmaster) July 20, 2020

Bakkt Explained For Dummies! Will This Kick Start The Next Bitcoin BULL Market?

Unfortunately, Bakkt’s trading volumes were far from what the crypto community expected. Despite this, company representatives continue to try to keep the interest of market participants.

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Has the Bakkt crypto platform met the expectations of investors? Understanding the issue
Has the Bakkt crypto platform met the expectations of investors? Understanding the issue
Has the Bakkt crypto platform lived up to investors' expectations? Understanding the issue
Has the Bakkt crypto platform met the expectations of investors? Understanding the issue

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