Institutional Interest On The Rise As Bakkt’s Bitcoin Futures Volume Increases Continuously

Bitcoin’s been on a downtrend lately. The price dropped from around $8,700 to its current level of $6,700, losing more than 20% in just a few days. Despite the overly negative sentiment lurking amid the cryptocurrency community, however, good news might stem from the fact that institutional interest seems to be on the rise. Bakkt, the Bitcoin futures trading platform geared for institutional investors, has seen steadily increasing trading volume.

Interest In Bakkt Bitcoin Futures Picking Up

Bakkt is the Bitcoin futures trading platform launched by ICE – the parent company of the New York Stock Exchange. It delivers physically-settled Bitcoin futures, meaning that traders receive an actual Bitcoin at the expiry of the contract, rather than its cash equivalent.

This was considered to be a huge move for the cryptocurrency market, but the latter didn’t respond well to Bakkt’s launch. In fact, the platform started with minimal trading volume, while the price tanked days later. Nevertheless, the volume has been increasing ever since.

Today, Bakkt saw a total of 1166 contracts traded, which is worth around $7.84 million as each contract is worth 1 BTC. This represents an increase of around 17% compared to yesterday’s volume. And it’s worth noting that the day isn’t over yet, which means that the above number is likely to increase.

The current all-time high, according to Bakkt Volume Bot, is 2728 ($20.3 million) contracts and it took place a couple of days ago on November 23rd.

ICYMI: Friday’s Bakkt Bitcoin Monthly Futures:

📈 Traded contracts: 2728 ($20.30 million, +66%) (New ATH 🚀)
🚀 All time high: 2728 (11/22/2019)
💰 Open interest: $1.75 million (+29%)

Follow @BakktBot for updates – Sats welcome @ http://t.co/TF6sNUwWpO 🤖 pic.twitter.com/Vy4M4NmoxY

— Bakkt Volume Bot (@BakktBot) November 23, 2019

As seen in the chart above, the volume is increasing progressively. Bakkt is oriented towards institutional investors. As such, the continuously rising trading volumes could be a sign that the interest of institutions is also picking up.

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It’s Not Just Bakkt

Another product that is more geared towards larger investors is the Grayscale Bitcoin Trust. The company recently published its Q3 report and it outlined that the trust saw $171.7 million in inflows for that period.

According to the release, this was the product’s best quarter in terms of inflow. More interestingly, though, the price of each share from GBTC currently costs $9.27. Given that each share represents 0.0009144BTC, this means that investors are happy to pay a premium of around 39% to gain exposure to Bitcoin’s price through Grayscale’s product.

The reason for that is fairly simple – by owning GBTC shares, investors receive exposure to Bitcoin’s price, without having to worry about storage and management. In any case, it does appear that institutions are starting to dip their toes in the industry.