In the period of sharp volatility of Bitcoin and the cryptocurrency market, community members are beginning to wonder what caused the price movement of an asset.
Obviously, the factors that influence price spikes are many and varied. Among them, the launch of new promising projects, important updates of coins, the launch of their own blockchains, the holding of IEO, listings on the stock exchange, regulator initiatives, including bans, statements by opinion leaders and politicians.
It is impossible to exclude from this number of objective reasons and price manipulations that are characteristic of the unregulated cryptocurrency market. These factors have a certain effect on cryptospace, although as the market develops, the degree of their influence begins to decline.
As part of this article, we will look at the impact of preparing for the launch of futures contracts on the platform for servicing institutional investors Bakkt exerted on the cryptocurrency market and moods of enthusiasts.
As we see, the start of testing futures contracts on July 22, another important step of Bakkt, did not cause a stir among the media or in the crypto community. Sergey Zhdanov, General Director of the cryptocurrency exchange EXMO, spoke about what the reason for the restrained reaction may be.
“The launch of Bakkt is mentioned for almost a year: for the first time the New York Stock Exchange (NYSE) presented its cryptocurrency platform in August last year. Then the launch of the platform was planned back in December, but due to the lack of permission from the regulator, the launch was first postponed to January, and then they stopped altogether calling specific dates.
At first, it was really possible to observe some connection between the market movement and recent reports about Bakkt, but gradually their influence became less and less noticeable, which analysts noted in spring.
During this time, Bakkt has got more than one competitor offering bitcoin futures. Among them are Fidelity Investments, ErisX, LedgerX and CoinFLEX.
Moreover, unlike Bakkt, ErisX and LedgerX have already received permission from the US regulator to launch deliverable Bitcoin futures, and the British CoinFLEX launched this product in February of this year. So if you wish, many people could already use this tool. ”
Indeed, new players are emerging on the bitcoin futures market who are ready to serve institutional investors. At the end of July, online trader TD Ameritrade announced the start of trading in Bitcoin futures.
It is curious that the launch of Bakkt competitors also did not have a noticeable effect on the price of Bitcoin. Does this mean that institutional capital is already entering the cryptocurrency market and at the moment does not feel an urgent need for regulated instruments?
Our expert also answered this question:
“I am convinced that the mass entry of institutionalists is directly dependent on regulation. And although their presence in the market is increasing, in comparison with traditional finances it is still insignificant.
According to Coinmarketcap, now the capitalization of cryptocurrency is about $ 270 billion, although even this figure is considered to be significantly overestimated. The capitalization of the world stock market a year ago was more than $ 80 trillion. Against this background, the cost of the entire cryptocurrency market is a drop in the ocean.
Obviously, institutional capital is just fitting into new decentralized finances. Hence, so dizzying forecasts of some analysts about the cost of Bitcoin in the future: they were made precisely on the basis that big business will seriously deal with cryptocurrencies, and they will gradually begin to replace traditional money.
Of course, there are signs that funds and corporations are already making plans to enter the crypto sector. But one of the reasons for the relatively small changes lies precisely in the uncertainty of cryptocurrency regulation.
At the same time, we are now observing the formation of relevant legislation at the level of countries and international organizations, but it seems that the process will gain full force no earlier than 2020.
Nevertheless, many corporations and banks (Facebook, Samsung, LG, Visa, Goldman Sachs, Bank of America, and others) are actively preparing to work in new realities. ”
It is likely that interest in the platform was also fueled by investors in the project, including the main stock exchange, the US NYSE, major global corporations Microsoft and Starbucks, and other well-known companies.
Only their references made us think that having such powerful support, which is impossible without serious agreements on launching the platform, the start of work is only a matter of time.
However, numerous delays from November to December 2018, and then to January 2019, cooled the degree of enthusiasm of the crypto community, which switched to other important news.
“During this time, much larger events have occurred on the market that take the role of cryptocurrency to a new level. So, for the first time, the US president expressed his position on cryptocurrency and Bitcoin.
In the US Congress for two days they discussed cryptocurrencies in general and the project of IT giant Libra, Facebook. More importantly, the head of the US Fed recognized Bitcoin as a competitor to gold.
And although in the short term, this news has already been played on the market, against their background, testing the platform, which has not yet received the necessary license, does not look so significant, ”says Sergey Zhdanov.
One cannot but agree that new events are perceived with great interest than long unresolved stories. However, recently it seems that the statements of politicians, statements about the prohibition of cryptocurrency in individual countries, for example, India, the launches of new wallets do not affect the BTC rate.
Now the main cryptocurrency demonstrates lateral movement, moving in the range of $ 9400-9600, not responding sharply to what is happening.
“In my opinion, the impact of news is rather short-term, in the long-term, there are other factors that in future will contribute to the growth of Bitcoin and the cryptocurrency market as a whole.
The very economic situation in the world is pushing us towards the gradual adoption of digital currencies. In addition, let’s not forget that a correction is quite good and you can and should earn money in a falling market, ”the general director of the exchange concluded.