Recent Spike on Bakkt Hints at Future Developments – Emogi Coin
Following the less than spectacular launch of the Bakkt platform, which coincided with the most recent significant drop in the price of Bitcoin and overall cryptocurrency market, many feel as though the platform will never have an influence on the crypto market. But this may be a short-sighted approach.
Contrary to what many expected, the slow launch of such a large, institutional platform is actually a good sign and hints at less manipulation and actual, physical settlement of Bitcoin.
Its no secret in the crypto space that much of the trading volumes presented on sites like CoinMarketCap are false, the result of numerous small (and some large) crypto exchanges doing wash trading to make their platforms more appealing or pumping the price of coins to cause FOMO. This well-known fact is also the largest barrier to products like a Bitcoin ETF being passed in the U.S. due to easily manipulated markets and prices.
And this is where platforms like Bakkt come in and can have a positive effect in the long term. While the daily trading volume on the platform continues to be unimpressive overall, there was one day recently that saw a 796% spike in contracts on the platform, going from 25 contracts the previous day to 224 and setting a new all-time high. While the figures have since dropped back down, it shows that interest is beginning to pick up.
As interest continues to grow over the following weeks and months, more and more of the circulating supply of Bitcoin will be pulled out of circulation and onto the Bakkt platform in order to meet the settlement requirements. All it will take is several large investors or institutions to claim their stake in this growing sector for the Institutional FOMO to begin.
With trillions of dollars in the current financial system looking for a decent yield or the next big thing as the global economic outlook is increasingly looking grim, Bitcoin is poised to be the next major safe-haven asset as the global shakeup unfolds.
With the Bakkt platform falling under the control of the Intercontinental Exchange, which is linked with under the umbrella of NASDAQ and the NYSE, the platform is poised to funnel untold amounts of global wealth into Bitcoin and the cryptocurrency ecosystem as the platform expands and adds more offerings in the future months.
And the key to all of this is the fact that all trades on the platform are physically settled. As more of these cryptos are pulled from the market, decreasing the available circulating supply, prices are likely to increase on the other markets as availability becomes more and more scarce.
The fact that Bakkt has gotten off to a slow start shows that larger players and institutions are actually taking their time to investigate this emerging investment class, along with a display of their investing experience. As many in the crypto space have become aware, trading markets often respond in a, “Buy the rumor, sell the news” fashion, as was the case with the Bakkt launch. Experienced crypto traders called for “Bakkt dump” following the launch and they weren’t disappointed.
But now, the dust has settled and Bitcoin has found solid support in the $8,000 range. The recent spike from 25 contracts to 212 contracts may just be the first sign of some bigger pockets entering the market.
Its best to keep an eye on this development, because if this trickle turns into a steady stream and then a river, there are sure to be some major waves felt across the crypto markets as the Institutions will have officially arrived.