Bakkt, Fidelity Could Solve Bitcoin’s Liquidity Issue

Over the past week, the price of Bitcoin has dropped by more than 35 percent, and the majority of analysts in the crypto space have shared the sentiment that the crash was triggered by the contentious hard fork of Bitcoin Cash.

According to Bart Smith, the head of digital asset at trading giant Susquehanna, a lack of liquidity in Bitcoin markets allowed the dominant cryptocurrency to be vulnerable to a large sell-off caused by the Bitcoin Cash hash power war and hard fork.

In the months to come, Smith explained that the entrance of Fidelity, ICE, and Bakkt into the cryptocurrency market could increase the liquidity of BTC and lead to a rise in capital in the space to soak up big sell-offs.

Importance of Fidelity and Bakkt

Currently, it is fairly difficult for an average trader to invest in the cryptocurrency exchange market through trading platforms like Coinbase and Bitstamp. Investors are required to hand in photocopies of government-issued documents, undergo rigorous Know Your Customer (KYC) processes, and comply with policies enforced by exchanges.

The impractical systems adopted by cryptocurrency exchanges as per the request of government agencies in the US, Japan, South Korea, and other leading digital asset markets have limited the cryptocurrency market to a relatively small group of investors that possess a certain know-how to invest in the emerging asset class.

Smith explained:

“Number one, the on-ramps for new capital is very difficult. If you’re a global institution, it is still very difficult to buy Bitcoin in a way you might want to. A wealthy individual from the G.I. Generation is not going to take a high-resolution picture of their driver’s license and send it to a website and send money there. They want to invest with Fidelity. They want to invest with Bank of America.”

The Susquehanna executive added that the limited number of fiat on-ramps in the cryptocurrency market made it difficult for Bitcoin markets to absorb growing sell-pressure placed upon by investors that have started to lose confidence in the short-term trend of BTC due to the Bitcoin Cash hard fork fiasco.

“That has led to the second problem which is without the new capital on-ramp, liquidity has been very low. And so we’ve kind of seen a stable price all through summer, it was at $6,000 give or take. Volatility got really light at the end of July. So what happens is in that environment, if you have a contentious fork, it does not necessarily create a tremendous amount of confidence and when those sellers come in, there’s just no liquidity to absorb it. Hopefully, with Bakkt, Fidelity, and further regulations, there are going to be enough capital to soak it up.”

Targeting Retail Traders

As of now, both Fidelity and Bakkt are leaning towards institutional investors as their target client base. But, if financial institutions like Fidelity, Goldman Sachs, and Morgan Stanley begin to provide cryptocurrency investment services to retail traders as proposed in October, it could substantially increase the liquidity coming from individual investors in the crypto space.

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Bakkt Looks for Support for Its Next Futures Contract

As Bitcoin continues to slide past the $4,500 mark, bullish investors need something to hold onto. Bakkt is trying to give it to them.

Intercontinental Exchange, the owner of the NYSE, is fighting the good fight with a plan to make cryptocurrencies mainstream.

Bakkt is its plan.

The new platform offers regulated trading, clearing and custody, and security. It is a safe environment for consumers to buy, sell, store, and spend digital assets.

Bakkt and Bitcoin

The platform’s first futures contract will be a Bitcoin one, as it is “the clear crypto leader.”

What will be the next futures contract?

In order to expand its offering, Bakkt is looking to the community to help decide what digital asset to support:

“As the world’s most liquid and widely distributed cryptocurrency, and where we’ve seen the most customer demand, bitcoin’s profile creates a liquid product on which to build a futures contract. We’ll consider additional contracts as the landscape evolves and as we receive additional customer feedback about what they want and need.”

>> Bitcoin Cash Hard Fork Controversy: Roger Ver vs. Craig Wright

Bitcoin Futures Contract

Bakkt has had to delay the first Bitcoin futures contract. Pending regulatory approval, it is now scheduled to launch on January 24th, 2019.

It made the announcement yesterday saying the following:

“As is often true with product launches, there are new processes, risks and mitigants to test and re-test, and in the case of crypto, a new asset class to which these resources are being applied. So, it makes sense to adjust our timeline as we work with the industry toward launch.”

The company has also blamed the “volume of interest” in the contracts and how that has meant more time needed to ensure everything is fully ready for launch.

Until Bakkt’s Bitcoin futures launch, it will be hard to think of any other coin launch yet. Success is riding on the first!

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Extreme Volatility After Bakkt Delay

Over the past 12 hours, the price of Bitcoin, which was dangerously close to breaching the $4,000 support level, surged from $4,050 to $4,560, by more than 12 percent.

On Coinbase and major fiat-to-crypto exchanges like Bitstamp and Kraken, Bitcoin dropped to as low as $4,030 for a brief period of time and recovered to $4,200 almost immediately after. Eventually, BTC rebounded to $4,500, showing some resistance in the low $4,000 region.

Bakkt Controversy

On November 20, ICE, the parent company of the New York Stock Exchange, released a statement regarding the delay of the Bakkt Bitcoin futures market launch from December 12 to January 24, 2019.

The official document shared by ICE stated that the institution needs more time to handle the onboarding of customers and clearing members before opening the futures market.

“ICE Futures U.S., Inc. will list the new Bakkt Bitcoin (USD) Daily Futures Contract for trading on trade date Thursday, January 24, 2019, subject to regulatory approval,” an excerpt from the announcement read. “The new listing timeframe will provide additional time for customer and clearing member onboarding prior to the start of trading and warehousing of the new contract.”

Following the release of the announcement, rumors emerged that the Bakkt delay caused the price of BTC to drop and the information was leaked to a handful of large-scale investors in the cryptocurrency market.

Some argued, given that Bakkt acknowledged growing demand for its futures product, that investors bought into BTC as it dropped to the low region of $4,000 and it was all a plan to accumulate more of the dominant cryptocurrency.

However, there exists no evidence to support the theory and the significance of the launch of the Bakkt futures market still remains in question. The impact of the Bitcoin futures market operated by Bakkt on the cryptocurrency sector is an uncertainty and the magnitude of the demand for Bakkt from investors in the US market, who are the target client base of the institution is unclear.

Generally, the sentiment around the Bakkt delay has been positive, even from Bakkt itself. Hence, it is premature to conclude that Bakkt somehow influenced the price of BTC in such a significant way for the asset to fall 12 to 15 percent in value.

“Given the volume of interest in Bakkt and work required to get all of the pieces in place, we will now be targeting January 24, 2019, for our launch to ensure that our participants are ready to trade on Day 1,” the Bakkt team said.

Not as Bad of a Drop

Peter Brandt, a renowned technical analyst and trader, published a table outlining the performance of BTC in past major corrections.

Since its all-time high, BTC is down less than 80 percent, considering its fall to $4,000. Even if BTC finds a bottom at $4,000, it is only the fifth biggest correction in the history of the cryptocurrency market.

There exists a possibility for BTC to test the $4,000 support level in the weeks to come, but a further drop below $4,000 can only occur if the sell volume of the asset intensifies to a point in which the volume of the asset hits $8 to $9 billion.

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NYSE Operator’s Bakkt Confirms End of January Launch Date For Digital Assets Platform

The Bakkt digital assets platform, which was created by the operator of the New York Stock Exchange (NYSE), announced in a Medium post today, Nov. 24, that they are now “targeting” Jan. 24, 2019 as a launch date.

The Intercontinental Exchange (ICE), operator of 23 leading global exchanges including the NYSE, announced the creation of Bakkt in August of this year.

Today’s Medium post notes that “given the volume of interest in Bakkt and work required to get all of the pieces in place,” the company has settled on the Jan. 24, 2019 start date in order to “ensure that our participants are ready to trade on Day 1.”

Bakkt’s Medium post, written by CEO Kelly Loeffler, continues by noting that the company is working closely with the U.S. Commodity Futures Trading Commission (CFTC) as they review the “Bakkt™ Bitcoin Daily Futures contract and the Bakkt Warehouse,” adding:

“These products represent a critical shift in the evolution of crypto markets toward more accessible, useful, and regulated instruments.”

The post concludes by sharing that Bakkt has “insurance for bitcoin in cold storage” and is currently in the process of “securing insurance for the warm wallet within the Bakkt Warehouse architecture,” adding that  “new features” will be shared in the upcoming weeks.

At the end of October, ICE had announced that they would list Bakkt Bitcoin (USD) Daily Futures Contracts for trading on Dec. 12, 2018, and that the product would be physically-settled and cleared by ICE Clear U.S., Inc. More recently, unconfirmed rumors reported that U.S. regulators could approve Bakkt’s physically delivered futures product as soon as the beginning of November.

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Bakkt to Lead Bitcoin Recovery, Feb 2019 ETF Denial Crashes BTC: Analyst

Alex Krüger, a well-recognized cryptocurrency trader and technical analyst, has said Bakkt will lead the recovery of Bitcoin throughout 2018 and the first quarter of 2019.

But, Krüger explained that the rejection of the Bitcoin exchange-traded fund (ETF) filing of VanEck, SolidX, and Chicago Board Options Exchange (CBOE) will lead to the crash of Bitcoin, possibly back down to the $6,000 support level and in worst case scenario, to the $4,000 region.

“Possible outlook for BTC: First, bull run on BAAKT & renewed ETF approval narrative early 2019. Second, ETF denied Feb/27, massive crash, goodbye 6k, hello 4k, cleanse all weak hands Lastly, halvening 2020 narrative and re-adjustments lead to sustained bull run for the rest of 2019 & 2020.”

Optimism Towards Bakkt and Faith of the VanEck-SolidX ETF

Bakkt, a strictly regulated cryptocurrency trading platform developed by ICE, the parent company of the New York Stock Exchange (NYSE), is currently in the process of establishing an ecosystem that enables both retail traders and institutional investors to invest in the cryptocurrency market with sufficient investor protection and through products that are compliant with local regulations in the US.

In December, Bakkt is expected to launch a cryptocurrency futures market, further increasing the liquidity of Bitcoin. Previously, the US Securities and Exchange Commission (SEC) rejected nine Bitcoin ETFs on the premise that the Bitcoin futures market is not of sufficient size to handle an ETF.

The entrance of Bakkt into the cryptocurrency exchange market, the involvement of Bitcoin futures market operator CBOE in the VanEck ETF, and the track record of VanEck in filing over 200 successful ETFs with the SEC have led to an increase in anticipation towards the VanEck-SolidX ETF.

Throughout the next two to three months, technical analyst Alex Krüger emphasized that renewed enthusiasm towards the market initiated by Bakkt and the VanEck ETF will allow the price of Bitcoin to climb back to major resistance levels.

Since August, Bitcoin has failed to breakout of the $6,000 region due to its low daily trading volume and relatively low trading activity in the global cryptocurrency exchange market.

Hence, as of now, the market needs a major catalyst to engage a proper short-term rally and upside movement, and the two financial institutions could be a major factor that may trigger the price of Bitcoin to increase.

However, speaking to CCN, Krüger firmly stated that the probability of the VanEck-SolidX Bitcoin ETF being approved remains extremely low given the concerns of the SEC towards the state of the cryptocurrency exchange market.

If Bakkt can begin to demonstrate a level of volume that comfortably trump the volume of cryptocurrency exchanges that offer derivatives or margin trading such as Bitmex and Bitfinex, the SEC could consider approving an ETF. The issue with that is, the probability of Bakkt surpassing the volume of existing cryptocurrency exchanges within a two-month span is fairly low.

Is it Possible ETF Rejection Doesn’t Hurt Bitcoin Price?

The launch of Bakkt, the introduction of Goldman Sachs Bitcoin futures trading platform, and the release of Fidelity Digital Assets have not had any impact on the price of the dominant cryptocurrency in the past few months.

The possibility that the rejection of the ETF does not hugely affect the price of BTC still exists. But, that depends on the narrative that is set by investors and the media in the upcoming months and the anticipation towards the ETF.

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US Regulators Could Approve Bakkt BTC Futures Launch in First Week of November

The Intercontinental Exchange’s (ICE) Bakkt cryptocurrency platform could get approval to launch its physically-delivered Bitcoin (BTC) futures product from U.S. regulators next week, an unconfirmed anonymous source told tech outlet The Block Thursday, Oct. 25.

Bakkt, which seeks to create a “regulated ecosystem” for institutional investors looking to gain exposure to cryptocurrency, had previously confirmed it planned to launch its futures product Dec. 12.

Should regulators give the project the green light, ICE’s Bakkt will begin launching its Bitcoin (USD) Daily Futures Contract for clients as soon as the first week of next month, according to an unnamed source “with direct knowledge of the situation,” The Block says.

The unnamed source also told the publication that Chicago trading shop DV Trading will trade Bakkt’s product.

Concerns that non-custodial options will ultimately detract from the industry’s credibility have surfaced from cryptocurrency figures in particular, with crypto enthusiast Andreas Antonopoulos warning over the impact of regulators approving Bitcoin exchange-traded funds (ETF) in the future.

Non-physical Bitcoin futures first launched from CBOE and CME Group in December 2017. Poor returns have combined with volatility in markets close to settlement dates, sparking debate among analysts.

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Bitcoin Futures | Bakkt Announces Futures Launch Date!

The launch date for Bitcoin futures on the Bakkt platform has been announced.

Bakkt is a platform for trading, storing, and spending digital assets, and was created earlier in 2018 by Intercontinental Exchange—the parent company of the New York Stock Exchange (NYSE).

Bitcoin Futures Launch Date

According to a document released today, the launch date for trading is December 12th, 2018. The document explains the idea further:

“Each futures contract calls for delivery of one Bitcoin held in the Bakkt Digital Asset Warehouse, and will trade in US dollar terms. One daily contract will be listed for trading each Exchange Business Day.”

The contracts will be physically settled and cleared by ICE Clear US Inc.

Earlier in September, ICE announced that the “first contracts will be physically delivered BTC futures contracts versus fiat currencies.”

Why Create Bakkt?

Bakkt is aiming to offer a federally regulated market for Bitcoin. Through its futures program, it will try to make Bitcoin a secure and trusted global currency with hopes of major adoption by big financial institutions.

Bakkt will create a path for these major money managers to offer Bitcoin mutual funds, pension funds, and ETFs as highly regulated, mainstream investments.

>> Elon Musk Tweets About Bitcoin and People are Losing It

Bitcoin Futures

Bitcoin futures offer traders the chance to bet on the price of Bitcoin at a later date. Traders can bet and profit accordingly.

The first major exchange to launch Bitcoin futures was the Chicago Board of Exchange (CBOE) in December 2017. The launch of Bitcoin futures caused mania throughout the market, to the point that trading had to be stopped twice due to CBOE speed breakers, which slow or pause trading when price movements are excessive.

Now similar to ICE’s launch of Bitcoin futures, NASDAQ is preparing to launch its own contracts soon.

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NYSE Parent Company Reveals Launch Date for Bitcoin Futures on Bakkt Platform

The parent company of the New York Stock Exchange (NYSE), Intercontinental Exchange (ICE), has announced the launch date for Bitcoin (BTC) futures on its platform Bakkt, according to a document released Oct. 22.

Bakkt is a platform for trading, storing, and spending digital assets that was established earlier this year by global exchange operator ICE.

Per the document, ICE will list Bakkt Bitcoin (USD) Daily Futures Contracts for trading on Dec. 12, 2018. The product will be physically-settled and cleared by ICE Clear U.S., Inc. The notice further explains:

“Each futures contract calls for delivery of one bitcoin held in the Bakkt Digital Asset Warehouse, and will trade in U.S. dollar terms. One daily contract will be listed for trading each Exchange Business Day.”

The announcement is backed by a previous statement in September that the company’s “first contracts will be physically delivered BTC futures contracts versus fiat currencies” against U.S. dollars, pounds sterling, and euro.

As previously reported, Bakkt will not support margin trading for its BTC contract. By refraining from allowing for margin, leverage and cash settlement, the platform will reportedly better support market integrity and enable the “trusted price formation” that it says is the key to “advancing the promise of digital currencies.”

In December of last year, the Chicago Mercantile Exchange (CME) and the Chicago Board Operations Exchange (CBOE) launched Bitcoin futures. This summer, the Federal Reserve Bank of San Francisco wrote an Economic Letter stating that “the rapid run-up and subsequent fall in the price after the introduction of futures does not appear to be a coincidence” and “it is consistent with trading behavior that typically accompanies the introduction of futures markets for an asset.”

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Coinbase Veteran Adam White Joins ICE’s Crypto Platform Bakkt

The former head of institutional products at major U.S. crypto exchange Coinbase Adam White will be joining Intercontinental Exchange’s (ICE) forthcoming platform Bakkt. According to a Medium post published today, October 15, White will be joining as chief operating officer (COO) this November.

The news confirms unofficial reports that had already been circulating last week. As previously reported, Adam White was Coinbase’s fifth-ever employee, joining in 2013 when the founders “were still working out of a one-bedroom apartment and Bitcoin was trading around $200,” and staying with the firm for five years as it grew to its current popularity.

In tandem with today’s Medium announcement, the new COO has spoken with Fortune about his reasons for making the move, saying he believes that ICE’s new venture will be the catalyst for those institutional investors that have been “waiting on the sidelines” to enter the crypto space. He is quoted as saying that:

“In 2017, I saw a big shift. The interest in Bitcoin and other currencies started changing from retail to the institutional side. But the level of infrastructure of the existing trading sites often didn’t meet their expectations.”

White went on to tell Fortune that he believes traditional banking giants have been waiting for crypto trading security standards to reach the mark of more traditional markets such as equities or bonds, claiming “that’s why I joined Bakkt.”

Fortune’s interview also covered White’s perspective on this year’s protracted crypto bear market, arguing that what matters is an increase in daily transactions for cryptocurrencies year-to-year, as well as new protocols for open source software developers.

As previously reported, ICE — the operator of 23 leading global exchanges including the New York Stock Exchange (NYSE) — unveiled its plans to create Bakkt, a “seamless” global ecosystem for digital assets, this August.

Today’s official post notes that the firm is focusing “on mitigating risk while creating opportunities for institutions,” outlining several details of its proposed “conservative market design,” and emphasizing that “commingling, leverage and rehypothecation” will not be features of its offering.

One of Bakkt’s most anticipated offerings include plans to offer a one-day physically delivered Bitcoin (BTC) contract, subject to pending approval from US regulators.

In late August, the firm had already emphasized it would not be support margin trading for its BTC contract, as reaffirmed today.

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Ex-Coinbase Executive Adam White Joins ICE’s Crypto Platform Bakkt, Sources Say

Former head of institutional platform group at Coinbase crypto exchange Adam White is reportedly joining Intercontinental Exchange’s (ICE) platform Bakkt. ICE’s new hire was revealed by anonymous sources familiar with the matter cited by news outlet The Block on Oct. 12.

White left Coinbase in early October, declining to comment on his decision. However, a spokesperson of Coinbase then said that the company was “extremely sad to see him go.”

As per The Block’s source, Bakkt has now hired White as its Chief Operating Officer.

The crypto trading platform Bakkt was first announced in August by the Intercontinental Exchange, which is also the operator of the New York Stock Exchange (NYSE). It has been developed in partnership with Microsoft and Starbucks.

As Cointelegraph previously reported, White has been working for Coinbase for almost five years and was its fifth-ever employee, joining the team at the time it gathered in a one-bedroom apartment and Bitcoin (BTC) was trading at around $200.

While White was working for Coinbase, the company deployed a series of services targeted at big institutional clients, such as custodian services and an index fund.

The exchange, which was recently valued at $8 billion according to some reports, has made a number of high-profile hires in the past months. For instance, this October Coinbase welcomed a board member of the Charles Schwab bank Chris Dodds, and in September it hired Fannie Mae’s former General Counsel Brian Brooks as its new Chief Legal Officer.

Moreover, this summer a former Amazon Web Services (AWS) and Microsoft employee Tim Wagner joined Coinbase as vice president (VP) of engineering.

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