ICE backed Bakkt Exchange decided to launch physically delivered Bitcoin futures trading and contracts. The announcement about the launch was made on 26th July, and the platform finally launched on 23rd September.
It’s been more than a week now since the platform has launched and the expectations by the crypto community were very high with the platform. The fact that Bitcoin contracts were physically delivered got the community excited to see the new product and how the things will work within the platform. Unfortunately, things didn’t go well for them as the moment Bakkt futures were launched, it performed poorly with the trading.
Only 72 Bitcoins worth $701,000 were traded on the first day and even after more than a week, the platform has only managed to do the trading for about $5 million. As compared to its Chicago based rival, CME, traded about 5298 Bitcoins worth $1.3 billion on its first day.
Along with this, a price crash was faced by Bitcoin, which took the price all the way down to $8,500 levels, and the market is still trying to recover from this fall. Many crypto analysts have blamed Bakkt’s flop launch and poor performance as the reason behind this sudden crash in the crypto market.
This flop launch can work as a lesson for launches that might take place in the future. These lessons are:
1. Whales are bigger than institutions
Whales have been a part of the crypto market from the early days. They were the first ones to enter the market and understand the importance of this digital currency. The whales invested in Bitcoin when it was launched, and they managed to bag huge amounts of Bitcoins at meager prices.
Whales are known for the market manipulation that they carry out, and over the years, they have been a major part of the market when it comes to price manipulation. The amount of Bitcoins the whales own is significant enough to cause fluctuations in the market and price, and no institution can compete with the whales and acquire such a massive amount of Bitcoins at current prices.
Bakkt Futures trading is predicting the future trades for Bitcoin, but this can be manipulated by the whales at any given moment keeping in mind the “bags full of Bitcoin” they have. In 2017, whales managed the price of Bitcoin by mass dumping, and this caused a sudden increase and a decrease in the price of Bitcoin.
2. Investors scared of Bitcoin
With the failed launch of Bakkt’s futures platform and the sudden decline in Bitcoin price, investors have taken a step back from the market. The volatility of the Bitcoin market has increased over time as the price fluctuations have risen more than ever.
Bitcoin is facing a hard time maintaining a bullish trend, and the trading volume has also decreased. This decrease in trading volume is because of the lack of investor’s interest in the market as they fear a massive price drop is about to hit the market.
3. Beware of FOMO
It took Bakkt almost a year to finalize and launch the much-hyped project about Bitcoin futures trade and unfortunately it turned out to be a failure. Many crypto analysts and investors made statements regarding the launch and how the Bitcoin price will increase after the launch of the project.
However, things took a different turn when the price started a massive downfall, and the whole market just witnessed a massive crash. Many people had a fear of missing out, and they invested in BTC before the Bakkt’s launch, this drop caused huge loss to many investors as the price further decreased and tested the $7,500 support levels recently.
The recent Bakkt launch was a flop show, and the Bitcoin price is currently trying correcting upwards, but these lessons have been enlightening for the entire crypto community. Many analysts believe that the Bakkt’s platform will slowly gain control, and the trade will increase slowly, but with such a negative outlook, it is unlikely that people will retake such risks.