Bakkt, the ‘optimistic backbone’ for bitcoin proved to be futile as bitcoin has started watching a nasty decline in the very same weak of bakkt’s stepping into the market. The launch of Bakkt was supposed to be a catalyst for the crypto market to escalate into a much higher value, unexpectedly, Bakkt’s entry is marked by the freefall of bitcoins and altcoins.
‘’For me, this (Bakkt) is the main catalyst that drove the snap in the downward-facing triangle …there is an old saying in the market ‘buy the rumor, sell the news’ . that is exactly what happened there on a very large scale.’’- the satirical statement is given by EToro senior analyst Mati Greenspan on Block TV. In his block, entitled ‘’Unsurprising Bloodbath’’,
Greenspan goes on to explain:
‘’In my mind, the main catalyst for last night crypto crash was due to the underwhelming Bakkt launch. People have seen buying the rumor with high hopes for months and many have now sold the disappointing news.’’.
he also points to the sharp fall in bitcoin hash rate as a possible explanation for the ‘’crypto crash’’. The hashrate basically indicates how much computing power is working to track bitcoin transactions. Others also cited the low volume as well as a technical change in the trading pattern.
Joe Di Pasquale, CEO of Bitbull Capital wrote –‘’ Bitcoins recent price drop is a result of technical and fundamental factors, including a breakdown of the consolidation range, Bakkt’s tame launch of futures, and a sudden network hash rate drop.’’
The Bakkt futures product settles in actual bitcoins, unlike a similar product from CME, which settles in dollars. Garrick Hileman, head of research at Blockchain.com called it ‘’an important development in maturation and legitimization of crypto asset market’’. The Bakkt product is meant for institutional investors who may have been wary of trading and hedging bitcoin exposure on less-regulated exchanges. But some Bitcoin investors and analysts said that early volume had been noticeably light for the Bakkt product and that the underwhelming start has hurt the price.
‘’The disappointing Bakkt opening signals to the crypto community that institutions are less ready to invest in BTC at scale than was supposed, which means the price was too high and due for a correction,’’
– wrote Alex Mashinsky, CEO at Celsius Network, a crypto lending, and depository company.
‘’What we have just seen is short-sellers and momentum traders piling on to make things worse, and now here we are back at support.’’
‘’I see two things – on the technicals, we were heading into a wedge formation that was going to break out one way or another’’– wrote Alex Gordon, the CEO of Crypto Dark Pool provider Omega One, he added ‘’ And on the fundamentals, the limp Bakkt launch has a sell the news quality to it….a lot of people were waiting for that assign that the institutions were finally here.’’
Blockchain.com’s Hileman argued that slow early volume shouldn’t be taken as a sign on Bakkt’s longer-term viability.
’’It is important not to rush to any kind of quick judgment based on launch day trading activity.’’
So, Bakkt is not the only factor for the freefall of bitcoins, but this is also true that the expectations from Bakkt were high which it could not at all meet. There is a very famous saying ‘’ A WELL BEGINNING IS A HALF WORK DONE’’, unfortunately, Bakkt had failed to perform its beginning well and so all its attempts seem to be a great fiasco. Whichever reasons are portrayed, but it cannot be denied that Bakkt has missed its first shot the cost of which will have to be borne throughout.