The much anticipated Bakkt debut, the cryptoassets settlement and custody branch of Intercontinental Exchange (ICE), has disappointed the market. The negotiated volume was below the expected and many have linked the warm debut of the exchange with the fall in the price of the bitcoin, which came soon after.
Since the launch of the exchange until the closing of this post, the platform had negotiated only US$ 6.5 million in bitcoin contracts. This equals to 4 minutes of trading on the giant Bitmex.
For the head of investments of Transfero Swiss, Carlos Franco Russo, there is no correlation between the fall of the bitcoin and the warm debut of Bakkt.
“It’s more a psychological factor, as today there are futures exchanges much bigger than Bakkt”, he says.
The executive, however, confirms that the market expected a much larger turnover. And that the bureaucracy to enroll in the platform may have disrupted this initial moment. As more institutional players enroll, the volume should increase.
The bitcoin market is still very focused on retail. As a result, exchanges like Binance has giant trading volumes. But since Bakkt is a regulated platform, players such as investment funds, family offices and pension funds will be attracted.
Bakkt’s debut brought innovations
Russo recalls that there are other futures exchanges such as CME and CBOE, but that Bakkt has brought some innovations. For example, the waterfall, a US$ 35 million guarantee if any player does not honor his commitment. In addition, regarding security, there is custody in cold wallets and an insurance of US$ 100 million for the bitcoins.
Despite the warm debut, the trend is that Bakkt actually attracts institutional money. Especially with regards to this custody service. If in the past big investors had to do the custody by themselves, now BAKKT can do it with the security they need.