The long-awaited launch of Bakkt, the cryptocurrency trading platform backed by the Intercontinental Exchange (ICE), finally took place on September 23, 2019, at 8 PM Eastern Time. The first bitcoin futures contract was executed at $10,115, marking the debut of the first U.S.-regulated, physically delivered bitcoin futures product.
This milestone represented a major step toward bridging traditional finance and digital assets. From its inception, Bakkt carried immense expectations — dubbed the “Nasdaq of crypto” — with backing from heavyweight investors including Li Ka-shing’s Horizons Ventures, Naspers (the largest shareholder behind Tencent), Microsoft’s M12 Ventures, and Galaxy Digital, amassing $183 million in funding and a valuation exceeding $740 million.
ICE envisioned Bakkt as a comprehensive platform offering trading, custody, and payment services for digital assets, catering to institutional players, commodity traders, and retail users alike. However, due to stringent U.S. regulatory requirements — needing approval as a designated contract market (DCM), derivatives clearing organization (DCO), and qualified custodian — Bakkt faced three major delays over the course of a year.
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It wasn’t until August 2019 that Bakkt secured final approval from the New York State Department of Financial Services (NYDFS), completing its regulatory puzzle and paving the way for launch. Yet despite this hard-won milestone, Bakkt’s debut performance fell far short of bullish expectations.
Underwhelming Start: Just 8 Bitcoins Traded in First 2.5 Hours
When the platform went live, optimism ran high. But within the first two and a half hours, only 8 transactions had been recorded — amounting to just 8 bitcoins traded. By the end of the day, total volume reached approximately 28 BTC, a figure that pales in comparison to early adoption metrics from competitors like CME Group.
For context, CME’s bitcoin futures achieved $460 million in trading volume during their first week and now average around $700 million daily. In stark contrast, Bakkt’s initial trickle did little to ignite market momentum. Bitcoin’s spot price reacted minimally, rising only **0.5% to ~$9,950**, remaining range-bound near the $10,000 mark where it had hovered for months.
This underperformance sparked skepticism across the crypto community. Critics remarked:
“The bullish hype is over — now comes the bearish reality.”
“Institutional faith in Bitcoin? Wake up.”
“Where’s Wall Street buying the dip?”
Some even joked: “Wasn’t Wall Street supposed to rescue us?” or “Are real trading volumes finally being exposed through Bakkt?”
While these reactions may seem harsh, they reflect legitimate concerns. After more than a year of anticipation and repeated delays, market sentiment naturally cooled. Enthusiasm gave way to realism — or exhaustion.
A Twitter poll conducted by crypto analyst Alex Kruger captured this divide: among 2,777 respondents, 49% believed Bakkt would fail, while 51% still believed in its success — a near-even split indicating deep uncertainty.
But perhaps more telling is the question: Where are the institutional investors? Despite Bakkt’s promise to unlock institutional capital, early data suggests most remain on the sidelines.
Why Institutions Aren’t Flooding In — Yet
One key reason for slow adoption lies in how traditional finance views digital assets. As noted in previous analysis by Odaily Planet Daily, while Bakkt solves critical issues around compliance and custody, it cannot instantly change institutional mindsets.
Many institutional investors still struggle to assign intrinsic value to cryptocurrencies using conventional valuation models. This perceived lack of fundamental grounding leads many to view BTC as speculative or high-risk — not suitable for core portfolio allocation.
Moreover, assumptions about rapid institutional inflows may have been overly optimistic. While 2019 saw growing interest from family offices and hedge funds, retail traders continue to dominate price movements.
As CZ (Changpeng Zhao), CEO of Binance, observed: although both institutional and retail trading volumes are rising on Binance, retail still accounts for about 60% of total volume — consistent with 2018 levels.
Similarly, Zhao Dong, founder of DGroup and shareholder of Bitfinex, emphasized that current inflows don’t resemble past bull runs. He explained:
“During true bull markets, OTC desks move $100–200 million per day at 10% premiums. Today’s ‘institutional’ buyers are mostly family offices making small allocations — not driving systemic change.”
Todaro, Research Head at TradeBlock, offered a more measured outlook:
“Adoption will grow over time. We should expect futures volume to gradually increase relative to spot markets — but not overnight.”
Su Zhu, co-founder and CEO of Three Arrows Capital, echoed this patience:
“Bakkt may start as a trickle before becoming a flood. Most regulated futures contracts see low initial uptake. Not all brokers are ready to clear contracts; risk systems aren’t fully integrated yet.”
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Why Bakkt Still Matters in the Long Term
Despite a lukewarm start, dismissing Bakkt would be shortsighted. Its significance extends beyond first-day metrics.
Regulatory Trust and Institutional Pathways
Bakkt’s biggest advantage is regulatory legitimacy. Backed by ICE’s reputation and fully compliant with U.S. standards, it offers a legally sound avenue for institutions wary of unregulated exchanges. For firms seeking exposure to bitcoin without violating compliance protocols, Bakkt provides a trusted gateway.
Setting Precedents for Physical Delivery
Bakkt’s physically settled futures require traders to hold actual bitcoin to back their positions — unlike cash-settled products offered by CBOE and CME. This mechanism reduces counterparty risk and deters market manipulation.
As BMan, founder of Metropolitan Capital, noted:
“With physical delivery, shorting becomes harder than going long. You can’t bet against bitcoin without owning it — which means you’re betting against your own holdings.”
This structural shift could promote healthier price discovery and long-term stability.
Paving the Way for Bitcoin ETFs
Perhaps Bakkt’s most impactful contribution is its potential role in advancing Bitcoin ETF approvals. The SEC has repeatedly rejected ETF applications due to concerns over market manipulation and custody security.
In June 2019, SEC Chairman Jay Clayton reiterated:
“Custody remains the primary hurdle — how do we ensure investors actually own their digital assets?”
Bakkt’s audited, transparent custody solution directly addresses this concern. By proving that secure, regulated storage is feasible, Bakkt removes one of the final roadblocks to ETF approval.
Inspiring Competition and Innovation
Bakkt isn’t alone. Its success has spurred rivals like LedgerX and ErisX (backed by TD Ameritrade) to develop similar physically delivered contracts — accelerating innovation across the ecosystem.
FAQ: Your Questions About Bakkt Answered
Q: What makes Bakkt different from other crypto exchanges?
A: Bakkt is unique because it offers regulated, physically delivered bitcoin futures under U.S. oversight, combining ICE’s financial credibility with secure custody solutions.
Q: Why was Bakkt delayed for over a year?
A: It required three separate regulatory approvals — for trading (DCM), clearing (DCO), and custody (via NYDFS trust license) — each involving rigorous scrutiny.
Q: Does low initial volume mean Bakkt failed?
A: Not necessarily. Early adoption for complex financial instruments is typically slow. Growth depends on broker integration and broader market confidence.
Q: Can Bakkt trigger a new bull run?
A: Not immediately. While it enables institutional participation, widespread capital inflows take time. It’s a foundational step — not an instant catalyst.
Q: How does physical delivery affect market manipulation?
A: It increases accountability — traders must possess real bitcoin to enter contracts, making large-scale spoofing or naked shorting much harder.
Q: Is Bakkt important for Bitcoin ETF approval?
A: Yes. By solving the custody challenge, Bakkt helps meet a key SEC requirement for approving a spot Bitcoin ETF.
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Final Thoughts: A Slow Burn With Lasting Impact
Bakkt’s debut may not have ignited a rally — but it laid essential groundwork. Its launch signifies progress in regulatory acceptance, institutional accessibility, and market integrity.
While Wall Street hasn’t rushed in yet, Bakkt represents a critical bridge between traditional finance and digital assets. The flow may start slow — but if history teaches us anything, transformative financial innovations often begin quietly before transforming everything.
Core Keywords: Bakkt, Bitcoin futures, physically delivered futures, institutional adoption, cryptocurrency regulation, Bitcoin ETF, ICE exchange