The most expected Bitcoin price rise post-Bakkt did not happen. At least, not yet.
The first Bakkt contracts as we reported went live at 8 PM EST on the 22nd September (00:00 UTC 23rd of September). The platform is the first to receive approval from American regulators and is a product of ICE, the operator of the New York Stock Exchange.
In a surprising move, the price dropped below $9,900 support right after the launch and it’s since followed a downtrend, currently trading at $9,553.
Aside from futile considerations that Bitcoin always behaves the opposite of what the common trader expects, people will remember the hype before the CME Bitcoin Futures launch, taking the cryptocurrency straight to $20,000 but on the 18th of December, the day of the launch, the value started to drop.
With CME futures, the volume was much higher, in the range of 460 million in its first week, while with Bakkt on the first day as little as 18 BTC were traded. But in both cases, the price of the top cryptocurrency seemed to have been affected negatively.
Why is this happening?
Futures take a while to settle, especially in a highly regulated environment as is Bakkt. Professional traders won’t clear from day 1, therefore it will take a while before volume picks up and we can really see an impact on Bitcoin price.
These Bakkt futures are different from any previous futures system as they are settled directly and physically only with Bitcoins. Therefore if and when the volume of trades spikes, it’s normal to expect a rise in price also.
This is also the main reason many Bitcoin experts and professionals have welcomed these contracts, they can see real value behind them because they are physically settled in BTC and for this reason, they will increase Bitcoin reputation and reliability over the long term.
Popular Twitter account Rhythm tweeted at the beginning of September how valuable these futures will be for Bitcoin while Tom Lee, co-founder of independent research FS Insight believes that Bitcoin has an “ability to improve trust with institutions to crypto.”
Hash Rate Dropped 40%
Moving away from the Bakkt launch, the latest price decline also coincides with a reported drop in the hash rate of the Bitcoin network, which saw numbers move from over 98,000,000 TH/S to 57,700,000 TH/s.
Although that number has recovered to 67,383,654 as shown in the chart above, the fact that it is still some way off from yesterday’s tip denotes lesser competition among miners to validate new blocks, and usually should lead to a drop in price.
On a final note, some analysts are still expecting Bitcoin price to go as down as $7,000 at some point this year, despite Bakkt and other pro-adoption activities like the recently announced 25,000 French retailers accepting Bitcoin soon.
They believe the drop will be necessary to stabilize Bitcoin and give it a major push in the aftermath. Overall everyone is still extremely bullish on the top cryptocurrency.
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