The overhyped Bakkt of “physical bitcoins” has resulted in a total disappointment. The first week started very slow, with only a few bitcoins traded daily. The actual trading volume is 100 BTC on Bakkt compared to 10,000 BTC on CME.
It is clear that paper bitcoins are moving the BTC price. Institutions and banks have an unlimited supply of cash and can open large short positions on CME against BTC and hold these positions for a long time. They can create paper bitcoin from nothing making the 21 million bitcoin total supply just a dream.
Big players have done this with gold for a long time. Paper gold volume is several times bigger than the real gold total supply, all this as a tool to suppress the price while accumulating more physical gold. The same scenario is happening with Bitcoin. Institutions message seems clear. They are not interested in Bakkt but are very interested in CME.
However gold prices are close to the production prices and the price can not be suppressed more with the same oil prices we have today. We need a $20 oil price to lower the gold production prices to $700-$800.
On the other side Bitcoin production costs work in another way. Bitcoin mining costs will rise at the beginning of 2020 when the block halving happens. This event happens every 4 years making bitcoin more scarce and rising the bitcoin production cost which should result in rising trading prices.
Some analysts say that Bakkt slow start is normal as volume needs time to build. However, bitcoin lost nearly $2,000 exactly after Bakkt launch. Is this a coincidence? If we go back in December 2017 will see that the same happened when CME launched, bitcoin started the long bear market going down more than 85% from the ATH.
Bitcoin might still go down to $5,500 but in February 2020 it might hit $50,000 says Peter Brand a well-known trading analyst.
Chris, just a wild guess, but I think BTC bottoms at $5500 next Feb and then begins a bull move to $50,000
— Peter Brandt (@PeterLBrandt) September 29, 2019
Despite the optimism these tweets give and others like Tim draper, Mcafee, etc… with even larger predictions, it is sure that wall street wolfs are there to take the opportunity to slaughter the sheep. It is hard to predict when they will decide to make the big pump and then the dump. The 2018 bear market has been a big lesson for those who survived.