Cryptocurrencies seem to be gearing up for a big week ahead of the launch of the US-based Bakkt trading platform. Analysts predict a price breakout partly due to the pending launch of the LLC platform.
From the start of this year, the Bitcoin price rose by about 200 percent. However, the last few months have seen it trading sideways. Bitcoin was trading around $10,250 last month. The yearly high was around $14000 in June. The price has ranged between $9500 and $10800 in recent days. It has neither plummeted much nor has it been able to touch the yearly high again so far. When a price breakout beyond the trend lines does happen, whether it’s a rise or a drop, it is likely to be significant.
Analysts are considering a variety of factors like regulations, technology leaders, arising competition through new cryptocurrencies and so on to predict where the crypto market might be headed next.
Cryptocurrency traders and analysts are hoping the new launch will encourage a Bitcoin bull run like the one in 2017. The bitcoin price rose from $1000 to almost $20000 between the start and end of 2017. There were hopes that institutional money would flow into Bitcoin and the Bitcoin craze was at an all-time high. The year 2018 saw banks and financial institutions adopting a cautious approach which led to the price plummeting down to $4000. This was an almost 90 percent fall from its peak. The other top cryptocurrencies had a worse fall and although Bitcoin recovered quite a lot in 2019, the others have failed to do so. This is in spite of the fact that changes in Bitcoin price reflect some moves in the other major cryptocurrency prices.
Bakkt platform was announced last year. It boasts of giant partners like Microsoft and Starbucks. It has also partnered with Boston Consulting Group and global bank BNY Mellon It received investment from Fortress Investment, Eagle Seven, and Susquehanna International. It has brought a new wave of hope to the cryptomarket. Intercontinental Exchange Inc., the owner of the New York Stock Exchange, established Bakkt in 2018. It was able to raise $182.5 million worth of venture capital funding in December 2018.
Bakkt is due to launch its ‘physical Bitcoin futures contracts’ on 23rd September 2019. These futures are contracts that will payout in the underlying cryptocurrency rather than cash. Under this, the traders or investors cannot sell more Bitcoin than what is actually in their possession. This is expected to lead to record growth of cryptocurrencies. Bakkt had started allowing deposits of Bitcoin into its warehouse at the start of September. Bakkt had planned to launch its futures exchange earlier, back in 2018, but regulations and unprecedented interest pushed the launch forward. It had to suffer many setbacks along the way.
Though originally believed to be focused on Bitcoin futures, Bakkt will build a broader range of services. It will seemingly arise as competition for other consumers- and merchant-oriented cryptocurrency businesses.