Institutional Interest Growing in Bitcoin Futures As BAKKT Hits New Record Highs
According to Bakkt Bot, a Twitter account that provides real-time data about Bakkt’s trading activity and Skew, real market intelligence for crypto derivatives, trading volumes for Bakkt’s monthly Bitcoin futures set a weekly record last week as trading volumes topped $124 Million, representing an 89% increase from the previous weekly record. In addition, max open interest on Bakkt’s Bitcoin futures also set a weekly record of $4.3 Million, a 218% increase from its previous weekly record. This comes after Bakkt’s daily trading volumes hit an all-time high on November 27, with 5671 contracts being traded worth $42.52 Million, surpassing the previous daily record set on November 22 when volumes hit $20.3 Million.
Bakkt’s Bitcoin futures have now been trading for 2 months, and appear to be gaining momentum despite initially lower-than-expected volumes. This is being seen as an indicator of growing institutional interest in Bitcoin. Furthermore, the continued rise in Bitcoin futures volumes seems to contradict the recent bearish sentiment that we have seen in crypto markets as a whole (see below-A). As well, volumes on other futures platforms like Huobi, Binance, Bitmex, Coinflex & several others have also seen volume trending upwards recently (see below-B).
While Bakkt’s surge in volumes can be interpreted as a sign of growing institutional trading interest, the bigger focal point here is the increase in open interest, which is reflective of institutions’ willingness to hold Bitcoin. In other words, institutions are viewing the recent dip in bitcoin’s price as an opportunity to enter long positions. Overall, Bakkt’s recent momentum has been largely interpreted as a positive for institutional investment moving forward, and comes as Bakkt prepares to expand its product offering with the launch of regulated options contracts a week from now on December 9th.
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