- Bakkt get green light from CFTC, to launch Bitcoin futures contracts next month
- Bitcoin Futures, Custody, Payments, & Compliance by Bakkt
- One-day physically delivered BTC futures contracts traded on registered exchange big for Bitcoin
After a year of repeated postponements, we are finally going to have physically-delivered Bitcoin futures.
September 23rd is the day when Bakkt is launching its physically-delivered Bitcoin futures contracts after receiving the green light from the CFTC.
“Transparency and trust to digital assets,” is what Bakkt vows to bring to the cryptocurrency industry which is still in its early stages.
The digital asset platform launched by Intercontinental Exchange, a US company that operates 12 regulated exchanges and marketplaces is expected to be the beacon for the institutional investors.
Bakkt: Bitcoin Futures, Custody, Payments, & Compliance
In the decade long history of Bitcoin, one of the most concerning issues with the crypto industry is the wild swings in prices of crypto assets.
This kept the institutional investors at bay though they have started to make their way in crypto space. But with ICE backed Bakkt making its way into the market while adopting practices employed in the global futures market, more interest from institutions is expected.
Bakkt is partnering with ICE’s leading futures exchange and clearing infrastructure to bring its physically delivered futures contracts to market participants in more than 30 countries. These participants will undergo AML/KYC rules consistent with CFTC-regulated markets.
In addition, “Bakkt will routinely participate in financial and security audits, as well as regulatory compliance reviews.”
As for the custody, it provides secure storage backed by insurance for digital assets held in frozen wallets. Moreover, they are working with leading merchants who recognize the potential of crypto-assets as these new global currencies evolve beyond speculative assets and or a store of value.
A way for large, risk-averse institutions to buy & custody bitcoin
Crypto market is largely designed to serve retail customers rather than institutional participants and Bakkt is bridging the gap — concerns related to lack of regulation, liquidity, market quality, fees, and operational risks — to access this market.
“It offers a way for large, risk-averse institutions to buy and custody bitcoin through an end-to-end regulated system approved by the CFTC and NYDFS, and backed by the sterling reputation of ICE,” said Jake Chervinksy, General Counsel of Compound Finance.
Most notably, these bitcoin futures are physically settled contracts, unlike 98% of futures in the finance industry.
Bakkt is offering an innovating one-day futures contracts, traders will thus take delivery meaning it will be similar to trading spot, as explained by economist and trader Alex Kruger.
Comments on Bakkt’s futures:
– in finance, 98% of futures are not physically settled as traders do not want to take delivery, even for physically settled contracts.
– Bakkt offers an innovative 1 day contract. Traders will thus take delivery => will be similar to trading spot. https://t.co/k4IsAmiegp
— Alex Krüger (@krugermacro) November 8, 2018
The fact that these futures will be traded on a fully regulated exchange, is huge to attract institutions and:
“could thus be an extremely bullish development IF demand is there.”
Bitcoin price meanwhile reacted somewhat positively to the news as we went above $10,500. But BTC/USD is yet again in the red by 0.54% while trading at $10,345.