What Effects Will Bakkt’s BTC Futures Bring to Bitcoin Market

What Effects Will Bakkt’s BTC Futures Bring to Bitcoin Market?

Bakkt, an Atlanta-based subsidiary of the Intercontinental Exchange (ICE), an American firm that owns the New York Stock Exchange, is testing the world’s first US regulated bitcoin settled futures this Monday, July 22nd. According to MD and quant strategist at Fundstrat Global Advisors, Sam Doctor’s statement in his Twitter post “there appears to be a critical mass of adopters ready to come onboard on day one of the Bakkt launch, with the sales team gaining traction among brokers, market makers, prop trading desks and liquidity providers.” And the full launch of Bakkt’s bitcoin futures, expected to take place late in Q3 2019, might be a huge catalyst for institutional participation in crypto market. 

Why Bakkt BTC futures may rally bitcoin as well as crypto market?

  • Bakkt’s management intends to provide compliant financial products by offering regulated custody as part of their daily and monthly margined Bitcoin futures contracts, which may lower bitcoin futures volatility in some degree. 
  • In December 2017, the CME Group and Cboe began issuing cash-settled Bitcoin futures contracts. Bakkt could potentially allow more institutions to bitcoin market by offering physically settled BTC futures. A large amount of new capital’s entering must boost bitcoin price to new high records.

During the Bakkt Digital Asset Summit, Commodities Futures Trading Commission (CFTC) commissioner Dawn Stump also noted that we have a rising demand for bitcoin futures for the public. It also allows bitcoin to carve the path towards Wall Street and institutional investors, including potentially pension funds. 

Bitcoin price trading range tightening, breakout imminent

Before Bakkt’s bitcoin futures testing launch, bearish sell pressure has increased across the crypto market, especially for bitcoin. Investors fear about the potential impact looming regulation may have on the industry and asset class. However, bitcoin’s bullish momentum seems not to be stopped. BTC price rose from lows around $9,200 to a high around $10,800 before falling back into the ever-tightening trading range. 

If bitcoin breaks above the current range as well as the monthly open and daily resistance zone $10,800, the bitcoin’s bull run may be back on. If btc price drops again, it will retest the recent low at $9,200, its parabolic run may be at risk of failure and leads to a larger decline. 

BTC futures market is full of opportunities to make money

When some traders are expecting the coming of the next bull, smart investors are seeking and take advantage of the opportunities in futures market to make great profits. It’s known that Bitcoin will consolidate for a period before it really steps into the bullish run, which means the price of BTC will perform some upward and downward movements.

BTC futures trading allows investors to go long or short BTC price, that is both uptrend or downtrend are profitable. Besides, one of the reasons why so many traders are attracted to btc margin trading compared to spot trades is that you can usually get higher leverage. Leverage involves borrowing a certain amount of money to increase your initial money. 

Here takes 100x leverage as an example. If you are required to deposit 1% of BTC as margin and you intend to trade 100 BTC contracts. Thus, with 1:100 leverage, you just need to invest in 1 BTC to open a 100 BTC position to short or long BTC price. When there is 1% price fluctuation, your profit/loss will also be 100%. 

Bexplus is a popular BTC futures exchange that provides Bitcoin, Ethereum, Litecoin, EOS and XRP futures trading with 100x leverage. Investors in Bexplus can enjoy No spread charge, easy-to-use trading simulator, 100% deposit bonus and BTC referral rewards. Register an account with the official invitation code 8T5vQ, you can enjoy 10% off transaction fee.