As is often said, you cannot keep a good man down, or maybe a good futures exchange for that matter. For many, the Bakkt exchange has been down on the canvas, perhaps even out for the count in the minds of many onlookers, but this “Rocky” of the crypto-verse is not done by any means. Daily numbers remain small by comparison to the CME and other derivative exchanges, but they are rapidly increasing. The management team has also announced a flurry of new innovative additions to the service offering, as well.
Within the past few days and weeks, we have been told that:
Having two different internal systems competing for patronage against one another could create competing pricing models, as well. Bakkt executives eliminated this issue by tying settlement prices back to the same index. CryptoSlate explains: ”Those concerned about the potential for a total deviation from the firm’s purported intention not to “create a paper claim on a real asset” may find comfort in one detail of the plan, however – the cash-settled offering will reportedly draw its price from Bakkt’s physically-settled BTC index.”
Is there an “arms race” developing between Bakkt and the CME? It appears that the gloves are now off and that Bakkt management curently feels confident enough to do what it must to gain market share in the Bitcoin futures and options space. After its rather abysmal start, the exchange has begun to ramp up volumes and record rates of increase on a daily basis, albeit that starting from a low base should show impressive gains.
In the last three trading days, Bakkt has recorded more than $10 million for each period, for a three-day record for the group of $42.5 million. It hit a another record of 1,622 BTC traded one day last week, while also crossing over the $1 million watermark for open interest. The CME Group was trading $133 million at the time with their cash-settled process, but who can say what might shift going forward.
When the CBoE discontinued its BTC futures program back in March, the CME surely won over a good bit of crossover volume. It will be interesting to see how this competitive battle plays out over the months to come, now that the CME has an active competitor once more.