Bakkt Forecasts Increase in Institutional Investor Involvement in Cryptocurrency Trading Market
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The crypto custody service Bakkt anticipates an upturn in institutional investor engagement within the digital currency trading arena.
Bakkt attributes the predicted influx of mainstream investors to the recent green light for Bitcoin ETFs by the SEC, setting the stage for wider adoption.
The forecast comes on the heels of the firm’s announcement of its financial performance for the latest quarter, as detailed in a report from PYMNTS.
Bakkt Witnesses Increased Trading Activity
Bakkt saw an impressive 324% increase in cryptocurrency trading volumes in the first quarter, concluding on March 31, propelled by active engagement from its clientele.
As Andy Main, Bakkt’s President and CEO, indicated in the earnings call, the rise in trading volume reflects the heightened demand, fueled by an active industry, growing coin values, and the boost in retail trading volume.
Traditionally, the crypto trading market catered to retail investors with a central limit order book trading model.
$BKKT Boom‼️
Bakkt Reports First Quarter 2024 Results: $854.6 million in total revenue from crypto and net loyalty
Strong crypto trading among clients with notional traded volume up 324% quarter-over-quarter
https://t.co/qZYisqKNC4— SHIB Bezos (@BezosCrypto) May 15, 2024
Bakkt, however, acknowledges the current model’s limitations for institutional players contemplating Bitcoin ETFs.
To cater to the institutional sector, Bakkt is developing BakktX, an innovative ECN tailored for institutional cryptocurrency trading, offering high performance, low latency, and cost-efficiency.
BakktX to Offer Prompt Trade Execution Solutions
BakktX is envisioned to allow instant trade executions, backed by Bakkt’s comprehensive network for liquidity.
It intends to present a trading platform with minimal fees to foster large trading volumes and meet institutional demands.
In anticipation of enhancing their trading tech solutions, the company aims to attract new clientele and bolster existing partnerships.
This year, Bakkt aims to widen its array of financial products and services, expand its client base, fortify relationships, and optimize cost structures.
The recent company restructuring with a 20% reduction in staff is part of a strategic initiative for operational streamlining and profitability enhancement, expected to save $7 million in 2024 and $13 million annually.
These decisions reflect Bakkt’s commitment to growth in a rapidly shifting market by focusing resources on emerging opportunities.
As reported by financial analysts, the trading volumes on key crypto exchanges saw a downturn in April, corresponding with Bitcoin’s drop from its peak.
A 26.1% drop in derivatives trading volume, the first decline in seven months, was recorded at $4.57 trillion.
The dip comes as major crypto exchanges like Binance witnessed a significant volume increase between October 2023 and March 2024.
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