Multinational investment bank, JP Morgan Chase, has claimed that Bitcoin’s recent decline in price was caused by the eagerly-anticipated launch of the Bakkt Bitcoin Futures product.
In a similar way to how Bitcoin’s value dwindled after the 2017 launch of futures on the CME and CBOE, Bakkt’s launch happened just days before Bitcoin dropped from above $10,000 to below $8,000.
Despite being hyped as a game-changer by several pundits throughout 2019, Bakkt’s launch in terms of volume has been utterly uninspiring.
On the first day it saw just 105 contracts settled, with a slight improvement of 217 on its second. When compared with the CME, which saw 5,270 Bitcoin traded on launch day, it’s been a massive disappointment.
JP Morgan’s Nikolaos Panigirtzoglou believes that while physically settled Bitcoin futures are a good sign for the market, the fall in price can almost certainly be attributed to Bakkt’s launch.
“It may be that the listing of physically settled futures contracts (that enables some holders of physical Bitcoin e.g. miners to hedge exposures) has contributed to recent price declines, rather than the low initial volumes,” he said via Bloomberg.
JP Morgan has historically taken a contrarian standpoint on Bitcoin and cryptocurrencies. In 2018 the bank’s CEO, Jamie Dimon, described Bitcoin as a “fraud” before announcing the launch of their own native digital currency just a few months later.
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