Will Bakkt Bring the Institutions to Crypto, BTC, ZEC, NANO Analysis Oct. 31

Markets 4 min, 14 sec READ

by Kevin George

The Bakkt exchange is getting closer to launch and could help spur new volumes. ZEC's second birthday sees a privacy upgrade.

BAKKT

The Bakkt exchange is getting closer to its official launch and the company announced recently that it would start trading Bitcoin futures on the 12 December. Developed by the Intercontinental Exchange (ICE) and the New York Stock Exchange (NYSE), Bakkt could one of the key platforms that opens the door to institutional investment. 

The Bakkt Bitcoin (USD) Daily Futures Contract will be a physically settled contract with a contract being equal to 1 BTC and moving in increments of $2.50. The physical settlement will take place in ICE’s Digital Asset Warehouse, which was scheduled for a November opening.

In a previous article, I noted that Mike Novogratz saw custody issues as the key block to institutional investment and the arrival of the ICE solution, at the same time Fidelity launches its own custody solution, could be a real game changer for the market. 

Retail (public) involvement in cryptocurrency is still a very small number with the Bank of Canada estimating that 5% of Canadians held Bitcoin. This is in line with other nations who see around 6-8% of the population holding digital wallets. If institutions light a fire under the continually stagnating market, the price moves will then draw more private investors. 

A deeper look at the Bakkt project shows that the aim is to build a real ecosystem for digital money. An earlier press release said,

The new company is working with a marquee group of organizations including BCG, Microsoft, Starbucks, and others, to create an integrated platform that enables consumers and institutions to buy, sell, store and spend digital assets on a seamless global network.

The same press release highlighted that Bakkt aims to leverage Microsoft’s cloud solutions for an “open and regulated” digital ecosystem. The Vice President of payments for Starbucks, Maria Smith, said the coffee chain, 

[…] will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into US dollars for use at Starbucks.

The Bakkt exchange and the Fidelity Digital offering are raising the bar for institutional investors to get involved in the market with less fear. Despite a gloomy Summer and a quiet start to the fall, cryptocurrencies may be in for a hot winter.

BTC

The price of BTC, and the overall market that tracks its movements is begging for the additional volumes that the new crypto solutions may bring. The mid-October spike in BTC after tether’s sell-off has retreated and given up the $6,500 level. Retracing 50% of an upmove can be a bearish signal and BTC now has $6,200 in view for support. The recent support has been good and this is really a waiting game now that will rely on headlines and volume.

ZEC

ZCash has successfully completed the Sapling network update this week. 

The privacy coin’s update includes new shielded addresses and performance enhancements, with a 90% time-reduction for constructing transactions and a memory reduction of 97%. The upgrade happened on the second birthday of ZEC, with the project’s developers stating they were, 

[…] one step closer to widespread adoption of an open, permissionless and private payment system.

The daily chart on ZEC shows a price that is sliding back into a range setup, similar to the setup in BTC. ZEC encountered stubborn resistance at the $130.00 level and now has support coming in at $110.00. The next path in BTC will dictate the next moves for ZEC.

NANO

NANO has been another coin on the drift in recent weeks with a current level of $2.72. That represents a near 50% decline from the highs of mid-September. 

Despite the decline, the market has been quietly trading in a downtrend channel and there is hope that we could see support here. A good close above $2.75 would begin the process and resistance would then form just above the $3.00 level. Trading above the upper channel line would set up a move back towards the September highs near $5.00.

NANO currently has a market cap of $265 million and ranks at number 31 on the list, with a circulation of 133 million, which is the maximum supply. The “zero fee” coin with instant transactions and infinite scalability, sees itself as a payments currency and therefore the price may lag other projects until the world turns more towards digital currency. NANO has the ability to process 1000x more transactions per second than Bitcoin, which would make the project ideal for micropayments, possibly on a social media platform or similar. The zero-fee element could also see it used as a base currency on an exchange. The company’s roadmap highlights that they are also in the alpha phase of testing for a Peer-to-Peer (P2P) "Plug & Pay" Point-of-Sale Platform aimed at vendor & mobile terminals. 

NANO’s speed and cost-efficiency could definitely see it having a bright future as a payments option.