Bakkt Delays Launch As Crypto Markets Crash to New 2018 Lows
Bakkt, the cryptocurrency trading platform created by financial industry giant Intercontinental Exchange, announced on November 20th that it has delayed its launch of Bitcoin (BTC) futures trading to January. The news comes as prices of cryptocurrencies are crashing across the board and hitting new 2018 lows.
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Bakkt to Be Delayed by More Than a Month
The news from Bakkt CEO Kelly Loeffler, who said that trading on the platform would begin by January 24th, came on the same day as cryptocurrency prices hit their lowest levels in 2018. Bakkt had last said that it would begin trading Bitcoin futures on December 12th, a date which itself had been pushed back from November.
There is no evidence that the recent fall in the crypto market affected Bakkt’s plans. Loeffler attributed the delay to the amount of work necessary to ensure everything was prepared. She said in a blog post that:
“Given the volume of interest in Bakkt and work required to get all of the pieces in place, we will now be targeting January 24, 2019 for our launch to ensure that our participants are ready to trade on Day 1. As is often true with product launches, there are new processes, risks and mitigants to test and re-test, and in the case of crypto, a new asset class to which these resources are being applied. So it makes sense to adjust our timeline as we work with the industry toward launch.”
Bakkt, which was announced in early August, is creating what amounts to a cryptocurrency exchange that will allow consumers and institutions to hold cryptocurrencies and trade them against fiat. The company also said it was working with Microsoft and Starbucks, and looking to create federally regulated markets and merchant applications, which likely means some type of crypto payment system.
Involvement of Intercontinental Exchange Seen to Buoy Crypto Adoption
The entry of U.S.-based Intercontinental Exchange–a publicly traded company which owns regulated securities exchanges, including the New York Stock Exchange (NYSE)–into the crypto market was seen by many as a validation and endorsement of cryptocurrency networks like Bitcoin and Ethereum.
Historically, cryptocurrencies, which are notoriously volatile, have been viewed with suspicion by the traditional financial services industry, though they have been slowly gaining some acceptance by Wall Street throughout 2018, with the Bakkt announcement being one of the prime examples.
Delay Comes As Cryptocurrency Markets Crash to Lowest Levels of 2018
Bakkt’s launch delay comes just as cryptocurrency markets are crashing after a two-month period of relative stability, reaching new lows for 2018. When Loeffler first announced the launch of Bakkt in August, she noted that the company was working to “create an open ecosystem that supports growing needs in the ~$270 billion digital asset marketplace”.
Since then, however, the total crypto market cap has fallen by 45 percent, with CoinBillboard data showing that it is now sitting at slightly over $145 billion USD at press time. Crypto markets had been relatively stable for several months until November 14th, when the market flash crashed. The price of Bitcoin (BTC) dropped by nearly $700 that day, and from then until today, BTC’s value has fallen by another 20 percent. Stock markets also sold off around the world.
Other cryptocurrencies have fared even worse, with Bitcoin Cash (BCH) being particularly hard hit, having fallen more than 50 percent since November 14th, in part to due to a contentious hard fork which saw rival development teams fighting over control of the BCH brand name. It now looks as though Roger Ver and Bitmain-supported Bitcoin ABC has emerged as the dominant chain.
Recent Market Slump Likely Has Multiple Causes
There are several possible reasons for why crypto markets have fallen so dramatically since mid-November. Along with the unease generated by the BCH hash war and the Bakkt delay, crypto trader and investor Josh Rager told Bitsonline that recent enforcement actions by the U.S. Securities and Exchange Commission (SEC) could be playing a role in creating negative market sentiment.
In recent days, the SEC brought and settled charges against the founder of decentralized exchange EtherDelta as well as two companies that conducted initial coin offerings (ICOs) in 2017.
From a technical perspective, Rager also noted that:
“Over the past few months Bitcoin has been very slow with little volatility. In technical analysis (TA), low volatility breeds volatile reactions after a long build up. Trading volume was at yearly lows [in recent months] and from a TA perspective, something had to give – either strong buy volume or strong sell volume. It was obvious that the move would be a strong sell off as we’ve seen over recent days.”
Another possible reason for the market slump may have to do with the SEC’s repeated refusals to give approval to a Bitcoin ETF, which means no new institutional money is flowing into crypto, as some had hoped earlier in the year.
What do you think of the Bakkt delay? Is it another blow to the flailing market?
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