In recent months, Bitcoin’s price was all over the place. It shot up over $10K in June, then crashed down to Earth after a period of stable price around the $10K mark. In the past few weeks, Bitcoin’s price has plummeted, however, and analysts from JP Morgan think they know why.
There were plenty of theories about Bitcoin’s crash. Some experts blamed the massive BitMex contract liquidations while others believed it’s the last drop before the supposed Bitcoin explosion. However, as it seems, the crash was most likely caused by Bakkt, a futures contract exchange created by the same organization that runs the New York Stock exchange.
A few days ago, a JP Morgan analyst suggested that Bakkt is the main reason behind the steep 20% Bitcoin price decline. Although there’s no way to know for sure, recent events surrounding Baakt might give an answer.
What is Bakkt?
Found in 2018, Bakkt is a Bitcoin futures exchange found by the ICE. For those unaware, that stands for International Exchange, the company behind the New York Stock Exchange. With Bakkt, users can bet on the future price of Bitcoin. All bets can be made and received in BTC. Since the platform is supported by the CTFC, many experts hoped that Bakkt would bring Wall Street money one step closer to Bitcoin.
Since the beginning, Bakkt had the public backing of Microsoft, Starbucks, and the Boston Consulting Group which helped create it. The platform added major investment groups to the list of supporters later to pave a way for future Bitcoin funds, pension funds, and similar. In order to improve its crypto-asset custody and storage, Bakkt acquired DACC while working with several companies on finding the best key storage solution.
However, for all the good it’s doing for the crypto world, it may also have inadvertently sent Bitcoin’s price south. At least crypto market experts from JP Morgan think so. Bakkt’s physical Bitcoin futures that have been expected to hit the market recently have resulted in low investors activity which led to the drop in Bitcoin’s price.
What’s Bitcoin’s Current Price?
After last week’s meltdown when Bitcoin fell from nearly $10K to the $8K neighborhood, not many experts were optimistic about the cryptocurrency’s future. Even worse, Bitcoin dragged altcoins in the mud as well. The slide continued this week as well, hitting its low point of around $8K on September 29. Things have slightly improved in the following days – currently, Bitcoin’s price stands at $8.3K.
The bulls rally followed a couple of bullish days and is seen as a positive sign by some. The majority of experts, however, think the upside is limited. This year hasn’t been kind to Bitcoin and with Bakkt in the mix, it could turn worse. The completion of other CME contracts and other factors could extend the meltdown on the BTC market, which means it’s not a good time to sell.