Bitcoin Price Eyes Further Consolidation as Bakkt Sets Date for BTC Futures Contracts

Bitcoin’s price has shown little movement over the last 24 hours, as low-volume, low-volatility trading supported a gradual consolidation for the world’s leading cryptocurrency. Meanwhile, the Intercontinental Exchange (ICE) has set a new date for the launch of Bakkt, a proprietary cryptocurrency trading platform.

BTC/USD Update

The bticoin price hovered within a narrow range on Tuesday, picking up where it left off at the start of the week. At press time, BTC was valued at $6,462.49, having declined 0.4% compared with Monday. The leading digital currency is trading at an $80 premium on Bitfinex.

Trade volumes have picked up slightly over the past 24 hours but remain well below $4 billion, according to CoinMarketCap. The $4 billion threshold is generally viewed as the minimum exchange-traded volume bitcoin needs to generate any kind of meaningful rally.

Bitcoin’s underlying volatility is once again approaching yearly lows. Over the past 30 days, the bitcoin volatility index has averaged 1.65%, according to bitvol.info. This figure conveys daily fluctuations in bitcoin’s open price.

According to CBOE Options Institute instructor Kevin Davitt, bitcoin has exhibited less price volatility than some of Wall Street’s biggest technology stocks. In a recent conversation with MarketWatch, Davitt explained how bitcoin’s 20-day historical volatility (HV) was lower than that of Amazon (AMZN), Netflix (NFLX) and Nvidia (NVDA). In fact, bitcoin’s 20-day HV has fallen nearly as low as Apple’s (AAPL).

ICE Sets Date for Bakkt

The owner of the New York Stock Exchange has set a date of Dec. 12 for the launch of its upcoming cryptocurrency trading platform. Bakkt will initially offer physically settled bitcoin futures contracts by mid-December, a move that could bring more institutional traders into the fold.

According to a notice issued on Monday, Bakkt’s new product is called the Bitcoin (USD) Daily Futures Contract. The contract size is one bitcoin, with prices quoted in U.S. dollars to two decimal places. A minimum price movement of $2.50 per bitcoin has been set. Block trades executed at a minimum of $0.01 per bitcoin are also permitted.

Investors who purchase a bitcoin futures contract will have physical units of the coin deposited into their account on settlement. Existing bitcoin futures markets offered by CBOE and CME are cash-settled as opposed to physically settled.

ICE’s first foray into cryptocurrency was announced back in August after it announced an ambitious plan to bring blockchain solutions to mainstream investors and consumers. The platform, which is backed by Microsoft, Boston Consulting Group and Starbucks, is “designed to serve as a scalable on-ramp for institutional merchant and consumer participation in digital assets, by promoting greater efficiency, security and utility,” according to CEO Jelly Loeffler.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi