Editor's Note: This article comes fromvernacular blockchainEditor's Note: This article comes from
vernacular blockchain
vernacular blockchain
(ID: hellobtc), author: Laobai, published by Odaily with authorization.
The U.S. government shutdown is still ongoing, and many tasks that need to be advanced by government departments have also been put on hold. Affected by this, the approval of the Bakkt futures trading platform, which has attracted the attention of blockchain industry insiders, may be postponed again.
Some time ago, some industry leaders posted an article saying that Bakkt will bring about a super bull market. In the message area of this article, readers have different opinions: some agree, some oppose; some follow the trend without thinking, and some express doubts.
In this regard, Vernacular Blockchain believes that every participant in the blockchain industry should have its own judgment on this matter. Just because you support a big guy, you can't agree with all his views, and you can't oppose all his views just because you don't like a big guy.
The point of view of Bakkt in this article is the same. To provide readers with a reference, if they think it makes sense, they can adopt it, and if they think it is wrong, they can also express their doubts and objections in the message area.
1. What is Bakkt and what are its fundamentals?
2. What is so special about it, and why is it regarded as the fuse of the bull market?
3. Are the facts really as optimistic as everyone expected, and are there any unoptimistic factors that have been overlooked?
secondary title
A unique talent in the cold winter of capital
Bakkt, simply put, is a bitcoin futures trading platform. Regarding its fundamentals, you can probably know why it has attracted so much attention from three dimensions.1. A number of top investment institutions invested heavily
These institutions are the "regular army" in the capital field. In contrast, the various capitals that participated in ICO last year were not in the same order of magnitude.Bakkt is a cryptocurrency futures trading platform founded by Intercontinental Exchange (ICE).
For Intercontinental Exchange (ICE), you may be unfamiliar with it, which is normal, just like many people don't know that Google's parent company is Alphabet, and Blizzard Entertainment's parent company is Activision.Not only that, the well-known subsidiaries of Intercontinental Exchange also include: Canadian Futures Exchange, Paris Stock Exchange, London International Financial Futures Exchange and other 14 securities and futures exchanges, as well as 5 clearing houses, which are the third largest in the world futures exchange.
1. Boston Consulting Group: a well-known American business management consulting company, with offices in more than 90 cities in more than 50 countries, with more than 16,000 employees.
Not only is Bakkt's parent company strong, but the 12 investment institutions that made the first round of investment are also strong
, pick a few for everyone to understand briefly:
1. Boston Consulting Group: a well-known American business management consulting company, with offices in more than 90 cities in more than 50 countries, with more than 16,000 employees.
2. Alan Howard: One of the 40 highest-paid hedge fund managers in the 2013 Forbes list.
3. Horizons Ventures: Horizons Ventures under Li Ka-shing.
5. Microsoft's Venture Capital Arm M12: Microsoft's venture capital.
8. Naspers: Tencent's largest shareholder.
……
6. Pantera capital: The first bitcoin investment company in the United States.
7. PayU: A financial technology company that provides payment technology for online merchants, with a business scope of up to 17 countries and a valuation of US$5 billion.
8. Naspers: Tencent's largest shareholder.
2. The capital is cold, but it has received a huge financing of 182.5 million US dollars
Everyone must know what the cryptocurrency market has become like recently, and the global capital market is almost in a "bleak winter".
Against such a background, it is no exaggeration to describe the huge financing of US$180 million that can be obtained as rare. Capital is profit-seeking, and it is more honest. It can be seen that in the eyes of capital, Bakkt is so "beautiful and worthy of capital".
3. Compliance + physical delivery + no margin + lightning network
From a compliance point of view, Bakkt is regulated by the U.S. Commodity Futures Trading Commission and has a formal license. Compared with trading platforms that have not obtained a compliance license, compliance means government endorsement and trust, which will greatly enhance investors. and user confidence.Physical delivery, this is the biggest difference between Bakkt and other bitcoin futures trading platforms, and this is also the main reason why Bakkt is generally believed by various bigwigs to bring about a bull market.In addition, Bakkt adopts a transaction principle similar to that of Lightning Network,
Use Layer 2
Off-chain transactions will only be uploaded to the chain during liquidation, taking into account user experience and liquidation data on-chain.
secondary title
Different Bakkt
Why is the launch of Bakkt generally interpreted by various bigwigs as the fuse for the arrival of the bull market? Maybe there are two main reasons:
1. In view of the strong strength of its parent company and investment institutions, as well as its own compliance, Bakkt is the most likely entry channel for the "regular army" before the Bitcoin ETF is passed.
2. Bakkt transactions adopt physical delivery, that is to say, the short positions traded on Bakkt will either be redeemed from the trading platform on the delivery date, or buy a corresponding amount of Bitcoin from the external market to participate in the delivery. In the case that the number of trading products itself has an upper limit, unlimited shorting is no longer possible, and long-term long-term trading has become an inevitable choice after a large amount of capital participates.
It is necessary to introduce in detail about physical delivery and the inability to sell infinitely caused by it.
Physical delivery means that regardless of long or short, when the delivery is closed, the delivery must be made in kind—the real BTC.
Some people may ask, what is the difference whether physical delivery is used? The difference is huge, for example:
In the absence of physical delivery, Xiao Ming can go to various trading platforms to short bitcoins. The number of short bitcoins can theoretically be unlimited. The difference can be settled.
If physical delivery had to be made, the situation would be very different. Under such circumstances, Xiao Ming would not dare to short Bitcoin presumptuously, and the amount of short selling would be extremely prudent.
Why is this so? Suppose Xiao Ming shorts 10 million bitcoins through futures. In other words, Xiao Ming needs to borrow 10 million bitcoins from various futures platforms and sell them. When the futures are due for delivery, physical objects must be used, so he has to buy back 10 million bitcoins and return them to the platform. At present, the theoretically mined bitcoins are about 17.48 million (this also includes those bitcoins that cannot be retrieved due to the loss of the private key). And buying a large number of bitcoins will lead to higher and higher bitcoin prices. This is a "short squeeze" - forcing short sellers to buy passively. If 10 million bitcoins cannot be bought, then Xiao Ming will default. Not only will all the money be confiscated, but there will also be jail time.
All short sellers are Xiao Ming in the example.
Through the above example, we know that physical delivery makes unlimited shorting impossible, and in extreme cases, it can also be "squeezed".
Some people may have doubts about this: When I do futures trading on Bitmex and other platforms, I need to have bitcoins to play. Winning and losing are also bitcoins?
This involves another problem. On a centralized trading platform, you cannot be sure whether the bitcoin in your account is "real bitcoin" or a certificate of deposit issued to you by the trading platform.
On January 3 of this year, which is the 10th anniversary of the birth of the first batch of bitcoins, the foreign currency circle launched a campaign called "Proof of Keys", advocating that all bitcoin users put their existing keys on January 3. The bitcoins of third-party platforms such as trading platforms are transferred to their own wallets, so as to expose some bad behaviors such as "creating coins out of thin air" and misappropriating users' bitcoins.
Seeing this, you must have understood the importance of Bakkt’s real offer delivery, and why some investors questioned the logic of “unscrupulous trading platforms doing evil” when the trading platform was “inserted” and liquidated.
Based on the above, we can probably conclude that the launch of Bakkt has been widely interpreted by various bigwigs as the trigger for the arrival of the bull market. The main reasons are: it provides a compliant, safe and reliable entry channel for the regular army; physical delivery regulates the market Order hangs an invisible but real "Sword of Damocles" over the heads of short sellers, which powerfully deters short sellers.
But is this view really unassailable? Maybe not...
secondary title
Non-optimistic factors that cannot be ignored
From the above analysis, it can be seen that Bakkt, which is compliant and firm-ordered, has an obvious effect on the Bitcoin market.
But can we draw the conclusion that "Bakkt can use this to reverse the current market situation and turn Bitcoin from bears to bulls"? I'm afraid it's not that simple. At least the following points are worth thinking about:
1. When will Bakkt go online is a question
Although everyone thinks that Bakkt should not be as "difficult to produce" as the Bitcoin ETF, the date of Bakkt has also been postponed twice, from the end of last year to January 24 this year.
At present, the continuous shutdown of the U.S. government has made the date of its launch even more unpredictable. Whether there will be special circumstances that will cause its launch time to be delayed again and again, everything is full of variables. All we can do is look forward to it being launched soon.
2. Will the regular army enter because of Bakkt, and when will they enter?
Bakkt is the best or even the only entry channel for the "regular army" before the Bitcoin ETF is passed. However, it must be considered that the "regular army" has "regular army" considerations.
The current market value of Bitcoin is around US$65 billion. Will Wall Street take notice of it in the short term? Let's look at a set of data. Ray Dalio, who became well-known for his new book "Principles" at the beginning of last year, managed a bridge water fund of US$160 billion, not to mention the sum of all venture capital funds on Wall Street.
With the volume of Bitcoin, how many regular troops can it accommodate?
In this regard, you may be wondering, the volume is not big, just a little money can pull in the market, how good is it? But think about it the other way around, big funds come in to pull the market, and the price of Bitcoin soars to $100,000 a piece, and then what? Who will "take over"? How is liquidity guaranteed? If it is like some of the current altcoins, one point pulls down one block, traps a group of receivers, and then plummets, is it feasible? This kind of behavior will not work in the compliance market and will be investigated by the regulatory authorities.
Small size means small consensus. Bitcoin is indeed No.1 in the blockchain circle. However, compared with the traditional financial market, it is still a baby, and it is not necessarily a good thing to "pull the seedlings and encourage them". Of course, traditional big funds are not stupid. Therefore, it may not be realistic to expect the regular army to rescue them on a large scale in the short term.
Furthermore, the various Wall Street elites who operate stock funds may not work well in the "wild land" of the cryptocurrency market. This will be an indelible blemish on your resume. They may be cautious and cautious before they come in, and it will take time.
Third, the advantage of the futures market is value discovery. Although Bitcoin has fallen by 80% compared to last year's highest price, the elites on Wall Street will not come in if they are pessimistic about the price trend of Bitcoin.
3. In the traditional futures market with physical delivery, the bear market will come and go
Physical delivery is very common in the traditional futures market, such as soybean, wheat, corn, oil and other futures, have always been physical delivery, but when it should fall, it still falls, even falling for a few months is normal.
Therefore, physical delivery is not a wishful gold medal for Bitcoin to summon the bull market.
image description
▲US soybean futures K-line chart
Furthermore, we look back at the earlier days of Bitcoin. At that time, Bitcoin futures did not exist, and there was no shorting of "counterfeit currency". In that "ancient" era, Bitcoin was also attacked by a bear market.
4. Physical delivery is not only limited to the Air Force, but also multi-military
The physical delivery will not only affect the Air Force, but also affect many militaries. When you make a big profit by opening a long position, after the delivery, there will be a large amount of BTC in the hands of Duojun. At that time, Duo Jun will sell the BTC in his hand to cash out. The price of BTC will be impacted by the selling pressure in the spot market, and it will turn around in an instant and reach a new price equilibrium point. Where is this point? No one can predict.
