Bitcoin Trading Volume Show Signs of a Maturing Market

The bounce is in. Though we have no way of knowing whether it’s completely over, the charts are looking pretty positive to me, as I had the pleasure of pointing out today on the popular crypto show Crypto Banter with CNBC’s Ran Neuner. Make sure to catch the recording here.

The most astonishing thing that we witnessed in yesterday’s astounding trading session wasn’t even the price movement. After all, a 30% correction is quite normal for a bitcoin bull market. It was the volumes.

As we can see from Messari’s real-volume figure, the total amount of bitcoin traded on the top exchanges yesterday surged to $27.7 billion. Compare that to the 2017 peak of just $7.8 billion, and it’s easy to see how the market has matured.

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Over at the CME Group, they’re also seeing record-breaking numbers. As they reported recently, the average daily volume for their XBT bitcoin futures reached an astonishing record high in December of 11,179 contracts, a number that has been smashed on nearly every trading day so far this year, with yesterday’s volumes clocking in at 27,690 contracts.

Bitcoin volume

As we mentioned in yesterday’s BMJ Newsletter, on-chain transactions are growing steadily, yet the network remains gloriously uncongested. Volumes at Greyscale, where many of the new institutional players have been accumulating, are also off the charts.

There is one exception to the volume madness though, which seems a bit peculiar given recent news events. …

Bakkt to the past

Alright, so here’s yesterday’s press release. Let’s dive right in….

bakkt

Back during the 2019 crypto bull market, there was a time when any mention of Bakkt in the news could move prices.

Their launch was one of the most anticipated events of the time for many crypto traders, second only to that of Libra.

It was to be Wall Street’s perfect bitcoin solution, a custody warehouse, fully regulated and integrated for institutional investors to pile in. The only thing is, it didn’t quite work out that way.

Then-CEO Kelly Loeffler left the company shortly after their lackluster launch, departing for a now nationally famous career in politics, and is currently under investigation for insider trading, among other alleged clandestine activities.

In short, she is under the microscope for using her position of power to promote the agenda of her husband’s firm above the good of the people.

Wait, let’s back up. …

What made the Bakkt launch such a flop was the volumes. For all the hype, they really should have been well-positioned to take the lion’s share of market activity from the current bull run.

Yet, yesterday when volumes were through the roof throughout the industry, daily turnover at Bakkt came in at a measly $35 million, which is just 0.12% of the Messari figure above.

So, now they have a new CEO and a new consumer friendly app in the works, a new partnership with a promising special purpose acquisition vehicle and an enterprise value of $2.1 billion.

Unlike Coinbase, which has managed to capture significant market share and has a (mostly) working app, Bakkt is not a stock that I’d personally be rushing to own, at least not until they’ve proven their ability to captivate this challenging market.

Self-driving banks

Back in 2018, there were a few attempts from yours truly to penetrate the notoriously un-crypto-friendly Financial Times, with very limited success.

At the time, I recall writing an op-ed for them describing my experience at eToro during the great bull run, but of course it was promptly rejected.

These type of news outlets generally prefer things that were written by more important people, heads of state and those who hold other prominent positions…people like Acting Comptroller of the Currency Brian Brooks, for example.

So, here’s an amazing article that graced the FT’s pages today written by the Crypto Comptroller himself. …

Financial times

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