Two major developments have occurred in the crypto-trading world, and they are both having an outsized effect on the industry.
Binance and Bakkt have both made announcements regarding their trading operations over the weekend, with Binance.US opening for business on Tuesday, and Bakkt commencing trading of futures on Sunday. These developments have strong implications for the broader market dynamics and how accessible cryptocurrencies are to retail and institutional investors.
Bakkt Finally Begins Futures Trading
One aspect of the Bakkt market that is notable is how it will be physically settled. This means that rather than receiving a payment in exchange for a different in the market price and the futures price, buyers will receive Bitcoin at expiration.
There are a few implications for the price of Bitcoin. First, with the newfound ability to short, there will be a simpler way for people to benefit from price drops in Bitcoin. This will probably bring some downward pressure on the price of Bitcoin, at least initially.
Second, the physically settled nature of the Bakkt exchange will change the market dynamics and likely lead to more institutional acceptance of Bitcoin. If these exchanges are in possession of Bitcoin, their trust level in the asset will likely increase.
The initial volumes on Bakkt have been less than promising, with just 18 Bitcoin of volume being traded in the first 24 hours on the exchange. This has attracted numerous takes, both supportive and derisive, on where Bakkt’s performance will go in the future.
Binance’s U.S. Push
Binance.US is planned to start trading fiat-crypto and crypto-crypto trading pairs on Tuesday, and will have 7 cryptocurrencies available for trading at that time. Those coins are:
- Bitcoin (BTC)
- Ethereum (ETH)
- Ripple (XRP)
- Binance coin (BNB)
- Bitcoin Cash (BCH)
- Litecoin (LTC)
- Tether USD (USDT)
Other coins like Cardano, Basic Attention Token, Stellar, 0x, and Ethereum Classic are planned to be launched in the future, but the beginning seven will serve as a strong start for hte platform. These tokens are being chosen based on their compliance with U.S. regulations. The exchange will only be available in 37 states in the beginning, with New York, Texas, and Florida not being included in the initial rollout.
Binance’s parent platform offers far more cryptocurrencies, but Binance.US will be focused on meeting regulations and standards specific to the U.S. America has some more stringent rules are cryptocurrencies and securities trading, so it made sense to shut down their original platform in June in order to create a more compliant version just for the United States.
Binance serves as the largest cryptocurrency exchange by daily volume, and now that they are offering fiat-to-crypto trading, Binance.US will serve as a powerful gateway for funds moving into crypto. This is expected to boost prices of cryptocurrencies as more money comes online.
Additionally, Binance intends to work on improving its compliance and security practices by pursuing partnerships with companies who have developed more advanced expertise in the field. This would include companies like Chainalysis for monitoring transactions and IdentityMind for a better KYC/AML process.
With Binance and Bakkt releasing these promising new developments, it seems like the industry is continuing to become more accessible to both retail and institutional investors. This bodes well for the future of cryptocurrencies, and may solidify the idea that we’re coming out of the crypto winter.