Bakkt, the digital asset trading company, has seen its physically-delivered Bitcoin futures contracts shake off a rocky start since it launched. After its adoption slowed within its first month, the contracts were able to achieve steady purchases in October, and November, daily trading records are being set almost every week.
The latest of those records, however, is coming at a bit of a fortuitous time. On November 23, Bakkt Volume Bot, a Twitter account that provides daily reports on the performances of the Bakkt Bitcoin futures, announced that the contracts had sold 2,728 contracts (worth about $20.30 million); a staggering 66 percent increase over the trading volumes recorded the previous day.
Daily summary of Friday's Bakkt Bitcoin Monthly Futures:
???? Traded contracts: 2728 ($20.30 million, +66%) (New ATH ????)
???? All time high: 2728 (11/22/2019)
???? Open interest: $1.75 million (+29%)
— Bakkt Volume Bot (@BakktBot) November 23, 2019
It is worth noting that this announcement was given at about 8:18 AM. At press time, data from the Intercontinental Exchange (the parent company of Bakkt) shows that there have been seven additional contracts sold, bringing the total for the day to 2,735.
The rise in daily trading numbers seems to be understandable. Bitcoin is in free fall right now, and investors are mopping them up in expectations of a rise in value.
The China Effect Strikes Again
As for the price drop, it would seem that this was China’s fault. Over the past week, Beijing has launched a full-on assault on cryptocurrency exchanges in the country, leading to rumors that several notable names have been forced to close down their operations in the country and exit for good.
So far, investigators have visited three notable regions; Shenzhen, Shanghai, and Beijing. In Shenzhen alone, investigators reportedly found 39 cryptocurrency exchanges operating illegally. Bithumb and Binance, two popular exchanges, were reported to have been affected by the raid, but both companies have come out to deny any such claims.
Still, others haven’t been so lucky. In the raid of Beijing, the BISS Exchange, a relatively popular exchange in the country, was caught and subsequently forced to cease its operations (while 10 of its employees were also arrested).
Bitcoin Can Survive this One
The effects are similar to those of 2017, when China first announced that it would be banning cryptocurrencies and Initial Coin Offerings (ICOs) in the country. Several companies operating in the country at the time were forced to exit, and the Bitcoin price- which had been on a steady rise for weeks- took a significant hit. Thankfully, this was the Bitcoin Boom, and not even the Chinese government could rain on the asset’s parade or stop it from ending the year with a value of almost $20,000 per token.
While the ban in 2017 seemed to be baseless, this one sure isn’t. The Chinese government is looking to launch its own digital currency, and it is embarking on a crackdown to ensure that other cryptocurrencies aren’t operating in the country, such as which will threaten the adoption of the asset when it gets launched.
It’s a classic consolidation tactic, and it has once again affected Bitcoin. Still, it isn’t enough to deter investors, as it is unlikely that Bitcoin will plunge to the depths that it did when the crypto winter hit in 2018. If it could weather that, it can weather this as well, and investors who buy now will be more than happy to see its price rise again.