Bitcoin’s price tanked almost 15% on Tuesday evening to a low of $8,165 in what was just the second day since the launch of Bakkt.
The Intercontinental Exchange (ICE) launched its long-awaited Bitcoin futures trading platform on Monday, September 23 to considerable fanfare, and the entire world of crypto is even more curious to see just how much an impact it will have on the market. Just two days after the platform’s launch and the immediate effect has seen Bitcoin, and several altcoins, drop significantly. It’s similar to the movement seen directly after the launch of the Chicago Mercantile Exchange’s (CME) Bitcoin futures in December 2017, which saw Bitcoin drop from $19,000 to below $17,000 in one day.
Bakkt’s first-day volume was just 71 BTC, compared to CME’s which was 5,298 BTC, although it is worth noting that CME’s launch came right at the peak of Bitcoin mania. Some analysts are speculating that the disappointing opening of Bakkt is a signal to the crypto world that institutional investors are not as keen to get involved in crypto to the same scale as originally thought. The decline in Bitcoin is most likely a sign that the price was too high, and due for a correction.
Despite the dipping value of Bitcoin in recent days, many analysts are optimistic about how Bakkt can contribute to cryptocurrencies in their efforts to gain traction in the mainstream. Avivah Litan, vice-president of research firm Gartner, said, “Over time, this will legitimatize the cryptocurrency trading market which could potentially have a positive effect on [b]itcoin values, especially during a global economic slowdown and negative interest rate environment as investors and traders seek alternative instruments to equity and bonds.”
Litan concluded by highlighting that Bakkt is undoubtedly a positive step forward for gaining institutional trust and interest in Bitcoin, but it does translate to a guarantee of future success, for which only time will tell.
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