BTC - Bakkt volumes see yet another all time high!
Another day, another new high for ol Bakkt
Bakkt's bitcoin futures products continue to gain traction.
After a slow start, Bakkt is finally starting to do close to the volumes that many had expected initially.
Yesterday (December 18th), Bakkt saw over $47 million in dollar volume traded.
That still isn't a ton compared to what the CME bitcoin futures do on a daily basis, but that significantly bested the previous all time high of $43 million in dollar volume.
Check it out:
(Source: https://twitter.com/BakktBot/status/1207665664586063872)
It happened yet again on an "up-day"!
Historically, some of the highest volume days on the Bakkt bitcoin futures products had occurred on days when the price of bitcoin was headed lower.
This sort of trend lead some to believe that perhaps these new institutions that were using Bakkt for bitcoin exposure were perhaps doing more harm than good.
Using the Bakkt product as a way to bet against bitcoin.
However, this latest volume figure, as well as the previous all time high, helps put those fears to rest as they both occurred on a day when bitcoin was up a significant amount.
They both happened on "up days".
Bitcoin futures are really catching on...
The total bitcoin futures volumes are averaging close to $10 billion in daily volume over the past month.
With 3 of the largest days ever occurring in just the past week or so:
(Source: https://twitter.com/skewdotcom/status/1200018870410629123)
This is starting to mirror other more traditional assets classes where derivative trading eventually becomes larger than spot market trading.
This is a very interesting development and something to keep an eye on.
Stay informed my friends.
-Doc
It's great to see more good developments from Bakkt.
Though I do have one interesting comment that I'd like your thoughts on, since you're always good at giving brief, but very meaningful commentary on what's going on:
I've recently started doing analysis for cryptos, though currently predominantly Bitcoin, on Seeking Alpha. That comment was left behind on my recent article regarding BTC's correction to sub-$7,000. I've already commented, showing the correlation between BTC's subsequent rebound and Bakkt's new high volumes, as you've explained it here.
I believe this person hasn't understood yet. I was just curious to know how you'd respond to this comment, as you've clearly been doing analysis longer than I have, o' wise one.
No matter how you slice it, increasing open interest means more money coming into a contract. Whether that is institutional or not is up for debate, but look who is allowed to trade the Bakkt contracts... are you able to? I know I am not... As far I understand those contracts are only open to institutions which means increasing open interest very likely means increasing institutional involvment. Whether they are buying and holding is another topic entirely, and wasn't exactly what I was saying. The point was that they are participating more, whether on the long or short side doesn't really matter, the fact that they are participating at all is what matters.
I'd have to read your post to really get an idea of what you were claiming from the data.
Ah, thanks for your thoughts, mate. According to my analysis, I proclaimed that increased open interest shows a greater involvement by institutions unto Bitcoin, however I did mention "accumulation", which may have been a mistake since the data didn't actually make clear whether they're going long or short.
So, I may make some more careful conclusions in future analysis, as I may have gotten a tad too excited from Bitcoin's strong rebound. Nevertheless, I did make some clarifications in the comments of said analysis.
In any case, thanks so much for the explanation :-)
On a side note, I have noticed that high open interest on strikes that are out of the money (or a ways away from the current market price) tend to pull prices towards those strikes, though not always. But sometimes...
Ah, another interesting point to note as well. Thank you.
It's interesting to watch these projects and the crypto market continue to grow and allow users in the space more options of what to do. I think this has been an incredible year with the release of bakt and other upgrades and projects and can't wait to see what the future holds once the market turns around.
Yep agreed. The next time there is a major bull market, it will be easier than ever before for people to participate, which hopefully means more and more money pours in than ever before.