Investor’s concerns about Bitcoin are rising, driving the price of the world’s largest cryptocurrency by market cap down in 2019. This waning enthusiasm comes as Bakkt, the highly anticipated Bitcoin futures trading platform created by Intercontinental Exchange Inc. (ICE), has turned out to be disappointingly small after launching two weeks ago, as outlined by the The Wall Street Journal

Bitcoin Price Plunges

Bitcoin’s price has fallen about 19% since Bakkt’s launch, a futures platform that allows traders to bet on whether the market will go up or down. The popular digital currency has fallen a steep 41% from a high of $13,879 per coin reached in June. For most of the past few years, as Bitcoin has been on a rollercoaster, including record highs at the end of 2017, and a “crypto winter” in 2018, bulls have been banking on its infiltration into the mainstream financial markets. 

Yet on Friday, just 49 contracts were traded, with 865 contracts traded in the previous nine sessions, according to Bakkt. 

Digital Currency Headwinds

Crypto enthusiasts hoped new products like Bitcoin futures would continue to draw institutional funds from investors seeking out alternative investments. However, it turns out that investors at large remain wary of headwinds including extreme volatility, market manipulations, fraud and theft, per the Journal. 

Another challenge facing Bitcoin is the inability to value the digital currency using standard metrics, according to BNY Mellon senior researcher Erik Swords. “I can’t sit here today and tell you we have an effective valuation model as it relates to Bitcoin,” he said. This makes it tough for a portfolio manager to justify allocation client funds into digital currency, and even harder to explain the investment if it loses money, per the Journal. 

While Bitcoin remains popular on the retail side, with the number of daily transactions on Bitcoin’s ledger, blockchain, averaging 345,000 in the last six months, compared to 316,000 over the past 12 months, per Blockchain.com, its does have an institutional foothold. There are currently a handful of over-the-counter trading desks targeted at hedge funds and professional traders, as well as CME’s Bitcoin futures contract, which launched in December 2017. 

What’s Next? 

While Bitcoin certainly has its flaws, market watcher Matt Huogan, head of research at Bitwise Asset Management, notes that some things just take time. “Things don’t explode out of the gate,” he said. “They take days, weeks, months and sometimes years.” As the SEC is slated to rule on two more applications for Bitcoin-based ETFs, if approved, Hougan says investors should expect the take off to be equally slow.