Futures delivered in kind prompt Bitcoin price to rise further, Bakkt futures investors prefer to use Bitcoin for physical settlement

According to Cryptoslate's report on February 16, the latest data from Skew shows that Bakkt's physical settlement futures trading volume exceeds the trading volume of its cash settlement products. In the past month, the average daily trading volume of bitcoin futures has reached $ 14 million, and more traders have chosen futures contracts settled in bitcoin.

bitcoin-2643159_1280 (Image source: pixabay )

Futures in physical delivery push Bitcoin price further

Bitcoin has a strong upward momentum in early 2020, and more and more institutional traders are starting to flex their muscles, waiting for Bitcoin to appreciate. Bitcoin in 2020 ushered in the best January in the past 7 years, and institutional transaction volume has also risen accordingly.

Earlier this month, open physical Bakkt contracts set a new record of $ 11.6 million, up nearly 114% over the week. The rise in the price of Bitcoin reflects the constant influx of new buyers into the market, which is expected to continue the upward trend of Bitcoin.

The latest data shows that compared with February, Bakkt's trading volume in January 2020 is not increasing significantly. According to BakktBot data, the total open interest in Bakkt Bitcoin futures is currently approximately $ 17.8 million.

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The picture shows the daily trading volume and open interest of Bakkt Bitcoin monthly futures. Image source: BakktBot

Data show that more traders want to settle their futures transactions with Bitcoin rather than cash

Bakkt's growing open positions in bitcoin futures are reflected in the increase in its trading volume. Data from Skew shows that more Bakkt contracts are settled in physical bitcoin rather than cash.

Skew said that Bakkt's cash-settled bitcoin futures averaged about $ 11 million last month, while physical-settled bitcoin futures contracts averaged $ 14 million over the same period.


The chart shows the total open interest and volume of Bitcoin futures for Bakkt. Image source: Skew

More and more institutional traders choose to settle contracts in Bitcoin, which provides the basis for further increases in the price of Bitcoin. A report released by Arcane Research in January noted that institutional investors are increasingly interested in Bitcoin. In addition, this report also shows that the actual value of 230 Bitcoin futures contracts delivered by Bakkt on January 17 exceeded $ 2 million. Bakkt delivered only 15, 17 and 8 contracts in October, November and December last year.

This means that the actual delivery of bitcoin futures contracts has increased by 1625% from the average of 13.3 bitcoins in 2019.

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The chart shows the number of Bitcoin futures contracts actually delivered by Bakkt between October 2019 and January 2020. (Source: Arcane Research)