According to researchers at Skew Markets, total open interest at Bakkt’s Bitcoin futures market — operated by NYSE parent company ICE — crossed $1 million.

The Skew Markets researchers said:

“Bakkt slowly taking off – total open interest just crossed $1mln with volumes also ramping up a quite a bit this week. Don’t bet against Jeff Sprecher.”

While Bakkt’s total open interest is still only a fraction of widely used margin trading platforms like BitMEX, which is showing $800 million in total open interest as of Nov. 3, analysts remain optimistic on the trajectory of the platform.

Cryptocurrency investors are closely observing the performance of Bakkt as a key platform to facilitate the demand for Bitcoin from accredited and institutional investors.

With the involvement of large-scale retailers like Starbucks, Bakkt has the potential to tap into the global consumer market with a Bitcoin integration, which Starbucks is currently working on.

We want to share more about our strategy around unlocking the value of digital assets through consumer payments https://t.co/JwfIF9tyYH

— Bakkt (@Bakkt) October 28, 2019

Bakkt is also the provider of the first physically-backed Bitcoin futures in the U.S., indicating that contract holders on the platform are delivered with physical bitcoin.

Jake Chervinsky, general counsel at Compound Finance, said:

“Why is @Bakkt important for adoption of bitcoin? A: It offers a way for large, risk-averse institutions to buy and custody bitcoin through an end-to-end regulated system approved by the CFTC and NYDFS, and backed by the sterling reputation of ICE. Compliance lawyers rejoice.”

The volume and total open interest of Bakkt in comparison to major cryptocurrency exchanges that have existed for well over five years are substantially small. But, because of its physically-backed contracts, Bakkt has the potential to affect the price trend of Bitcoin in the long term.

As such, as the utilization of Bakkt rises, it could bring more balance into the global bitcoin market that is still arguably dominated by individual investors across exchanges like BitMEX, Coinbase, and Binance.

Since late September, the daily trading volume on the Bakkt Bitcoin futures market has increased from $1.2 million to $6.2 million, briefly achieving $10.3 million on Oct. 28 after the Bitcoin price abruptly surged from $7,600 to over $10,000.

Strategists like Su Zhu, the CEO at Three Arrows Capital, said following the launch of Bakkt that the platform is unlikely to see large volume immediately after its opening as it would need futures brokers to prepare. Zhu previously said:

“Bakkt will be likely first a trickle and then a flood. The reality is that most regulated futures contracts get low adoption on day1 simply b/c not all futures brokers are ready to clear it, many ppl want to wait and see, the tickers are not even populated on risk systems, etc.”

The volume of Bakkt already showing signs of a noticeable increase less than three months after its launch suggests that bitcoin as a store of value is appealing to accredited and institutional investors.

The post Bakkt crosses $1m in open interest, what does it show about Bitcoin? appeared first on CryptoSlate.

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