Binance Research: Market Indifference to BAKKT Launch Brought About September Crypto Market Drop
Besides BAKKT, Binance said its OTC desk has seen more sell flows than buys. Traders have moved out of their altcoin positions and even BTC positions when BTC prices were around $10,000.
October 10, 2019 – Bitcoin’s price hovered to $8,000 level in the past few days, a price level it has not experienced since June 2019. While Bitcoin remains 150% higher than the yearly low, it is 40% below the yearly high. Cryptocurrency Exchange Binance released its market outlook for September 2019 and, for one, pointed to the BAKKT launch as one of the reasons for the market drop.
Binance Research suggested that the much hyped-release of BAKKT, which launched physically-settled Bitcoin Futures, is a possible reason for the September “bloodbath”. Right after BAKKT, BTC prices drop over $1,000. Binance noted how many observers and analysts looked at BAKKT as the channel that will primarily bring large institutional investors into cryptocurrency. As previously mentioned on BitPinas, BAKKT would allow them to take positions on cryptocurrency in a “federally-regulated venue” – in avenues where these institutions are more familiar with. Binance said that while BAKKT launch has been disappointing, it may certainly still bring large institutional investors in the future. It pointed to CME Futures, which had a sluggish start but picked up volume afterward.
“Short-term wise though, Bakkt’s disappointing start seems to have been a contributing factor to the recent price decline.”
Besides BAKKT, Binance said its OTC desk has seen more sell flows than buys. Traders have moved out of their altcoin positions and even BTC positions when BTC prices were around $10,000. In a concluding statement, it said:
“It seems as though traders are unsure about whether BTC will go back to the $10,000 range, or drop even further, and are waiting before taking any measures. Once again, BTC dominance will need monitoring as altcoins gained some ground on BTC for the first time in a few months.”
A separate report by JP Morgan Chase & Co (via Decrypt.co and Bloomberg) also pointed to BAKKT Launch for the price decline.
“It may be that the listing of physically settled futures contracts (that enables some holders of physical Bitcoin e.g. miners to hedge exposures) has contributed to recent price declines, rather than the low initial volumes.”
Sources: Binance Research, Decrypt, Bloomberg
This story is published on BitPinas: Binance Research: Market Indifference to BAKKT Launch Brought About September Crypto Market Drop
