Physical Consignment of Bitcoin in Bakkt Futures upturns 44% in March

March 26, 2020 184


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Physical Delivery of Bitcoin (BTC) for futures on the Intercontinal Exchange (ICE)’s Bakkt platform is active enough, inspite of a hectic month for the markets.

The data from Arcane Research admits that the number of traders preferring to collect physical delivery of the cryptocurrency accelerated 44% in a single month.

Physical vs. Cash settlement

The Bakkt’s Bitcoin futures contracts fleed live in September 2019. Many reporters declared that physically delivered the trading for Bitcoin futures, and it provides traders a plain exposure to the asset, that serves a leap forward for the institutional acceptance of the coin.

As the physical delivery of the Bitcoin over the contract expiry has raised, the other metrics for Bakkt in March, that is, the amount of traded contracts and open interest has turned down.

As per the tracking data composed by Bakkt Volume Bot, the twitter handler (@BakktBot), which is basically not associated with Bakkt but with the Dutch journalist as well as crypto author Gert Jan Laterie, the traded contracts amount on Bakkt was at $7.73 million i.e., 11161 on March 25, that is down from all-time high of 6601 on December 18, 2019. Moreover, the open interest was around $4.16 million.

Paper Trading

As the global markets analyst and the trader, Alex Kruger has also noted that the number of traders choosing for physical delivery had been severe in the first few months from the time of launch of the Bakkt contract.

In late November 2019, he added:

Bakkt has generally excited Bitcoin Bulls, and the amount is flourishing aggressively. Moreover, it is expanding at high speed from a low base. But Bakkt seems to be special for Bulls is not only its volume but the physical delivery of the Bitcoins. The number was 17 Bitcoins in November.

In a recent tweet, Kruger squabbled over in fall 2019, Bakkt activity wasn’t that dissimilar from CME. It is basically paper trading, which is a reference to the cash-settled Bitcoin futures on CME, which is launched in winter in 2017.

Kruger was penetrating that nobody can take physical delivery. He additionally said that it wouldn’t be a problem as it is common for futures traders for not taking any delivery in all aspects. The Bakkt is absolutely no panacea.

So, the alternatives to physical delivery are selecting to overpower a contract, which perpetuates the price theory on the elemental asset.

Bakkt has now proved that its launch of a cash-settled Bitcoin futures contract with the ICE Futures Singapore.

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Published on March 26, 2020 by Shelly
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