Record-high Bakkt Bitcoin delivery exposes institutional frenzy for BTC

Published at: Oct. 16, 2020

Data from Arcane Research shows Bakkt Bitcoin exchange saw another record-high month from Sept. 20 to Oct. 20. This follows a noticeable rise in institutional demand for Bitcoin (BTC) from public companies in recent months.

Bakkt, the digital asset payment platform and derivatives exchange, is tailored for institutional investors in the U.S. It is operated by Intercontinental Exchange, the parent company of the New York Stock Exchange.

When the volume of the Bakkt Bitcoin futures market increases, which physically settles Bitcoin contracts, it typically demonstrates growth in institutional appetite for digital assets.

CME, LMAX Digital, and Bakkt volumes show the institutional Bitcoin market is growing rapidly

As shown above, Cointelegraph and Digital Assets Data reflect a significant surge in futures volumes across multiple exchanges in the month of October.

According to the analysts at Arcane Research, 400 BTC contracts are set to expire in October at Bakkt. Month-over-month, the data shows a 14% jump from September.

Bakkt’s volume and open interest are important in gauging institutional activity because it is one of the three widely utilized platforms by institutions alongside LMAX Digital and CME.

As such, Arcane Research said that the substantial increase in futures contract deliveries on Bakkt signifies rising institutional demand. The researchers noted:

“Another ATH BTC delivery on Bakkt this month. Over 400 BTC futures contracts were held to expiry in October, an increase of 14% from September. With another record-breaking month on Bakkt, the demand for bitcoin is increasing among institutional investors.”

Atop the high trading activity on Bakkt, LMAX Digital and CME are also continuously posting large demand.

Data from Skew shows that LMAX Digital remains the biggest spot exchange in the global market by volume. According to Skew, LMAX Digital processed $135.6 million worth of BTC in the last 24 hours. This exceeded the daily volume of Coinbase, Kraken, and other major retail-focused exchanges.

Since LMAX Digital primarily facilitates trades for institutions, the exchange surpassing Coinbase depicts the current institutional landscape of Bitcoin. There is strong demand coming from institutions, especially following recent high profile investments of Square and MicroStrategy.

Similar to Bakkt, the CME Bitcoin futures market has also seen an increase in open interest. Since Oct. 2, following the monthly expiry for September, CME’s Bitcoin open interest rose from $345 million to $561 million.

Industry executives view institutional growth as a positive

Industry executives and high-net-worth investors in the cryptocurrency market expect the trend of rising institutional appetite for Bitcoin to continue.

Tyler Winklevoss, the billionaire Bitcoin investor and the co-founder of Gemini, said Bitcoin is steadily evolving into a corporate treasury asset.

When MicroStrategy announced that it acquired $425 million worth of BTC, the company emphasized that it considers BTC as the firm’s primary treasury asset. Winklevoss wrote:

“Bitcoin is on its way to becoming a corporate treasury asset. Michael Saylor and Jack are leading the charge. Soon many other companies will follow, and eventually central banks. This is just the beginning.”
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