Bitcoin options trades on Bakkt have slowed to a stop, with not a single trade opened in the last 10 days.
According to blockchain data provider Skew, the exchange has seen a marked decrease in open contracts since mid-January.
It's been 10 days since the last option trade on Bakkt 💤 pic.twitter.com/1xYiylC8fr
— skew (@skewdotcom) January 28, 2020
The last Bitcoin options trade to open on the exchange was 10 days ago on January 18, which was for just under $200,000.
The highest contract to open this month was during the second week of the new year, for just over $500,000.
In comparison, the Chicago Mercantile Exchange’s (CME) Bitcoin options saw around $2.3 million in volume during the first 24 hours of trading. All of the trades opened on the CME were calls – essentially betting that the BTC price would rise.
It’s bound to be a disappointing start for Bakkt, which previously enjoyed new highs in November in anticipation of its BTC options opening.
Bakkt has recently appointed a new president, Adam White, who this week shared that the exchange is exploring new products aimed at consumers.
Is there any demand for Bitcoin options?
It may be unfair to say that Bakkt has completely failed to generate demand as its futures trading volume has remained fairly consistent since its launch.
This has led some to speculate that there’s simply no real demand for Bitcoin-based options contracts.
However, Bakkt’s competitor, the CME, has reported fairly high interest in options contracts since their launch earlier this month.
The exchange reported that 54 contracts were opened in just 24 hours after launch, worth a total of $2.3 million in BTC – surpassing the total volume of Bakkt’s entire contract history. And the volume has remained fairly consistent since.
The CME also stated in September 2019 that it’s going to be doubling its Bitcoin futures position limit to $100 million.
Some have pointed out that futures and options exchanges tailored specifically to cryptocurrency, such as BitMEX and Deribit, have much higher daily volume than contracts offered by legacy financial providers moving into the digital asset markets.
This could imply that institutional investors simply don’t have the desire to speculate on Bitcoin at this time, or they’re waiting in the wings for better market conditions.
You can read more about Bitcoin options and futures contracts here.