Cryptocurrency Derivatives Series: Bakkt To Officially Become Counterpart of CME For Cash-Settled Bitcoin Futures From Dec.9th

The ICE-backed bitcoin derivatives marketplace, ‘Bakkt’ has recently been in the news of its launching plans of bitcoin futures with cash-settling facility in 2020.

The company after successful commencement of custodian service to institutional clients in the recent past, as a part of its expansion plans from its ongoing physically-settled offerings, Bakkt’s COO, Mr. Adam White made an announcement at Coindesk’s Invest conference in New York this week, stating that the Inter-Continental-Exchange owned firm intends to launch cash-settled contracts before 2020.

Intercontinental Exchange has now announced the launch of the Bakkt™ Bitcoin (USD) Cash-Settled monthly futures contracts. Upon the close of consultation and obtaining of relevant approvals for the rule changes, ICE Futures Singapore plans to list the contract on December 9th, 2019.

Thereby, please be noted that the new contracts would be listed on ICE Futures Singapore and cleared by ICE Clear Singapore, which are regulated by the Monetary Authority of Singapore.

Unlike CME BTC futures contracts, where the prices are cash settled, Bakkt offers trading facility for the physically deliverable bitcoin futures contracts. Since its launch on 23rd September, it is gradually picking up the momentum in its trading volumes owing to the growing interests from the institutional investors.

While the cash-settling contracts would be subject to the CME CF Bitcoin Reference Rate (BRR) for the financial benchmarks. Renowned exchanges, such as GDAX, Bitstamp, Kraken, and itBit are the constituent exchanges to provide the required data for computation of BRR.

Bakkt has also announced their launching plans of the first regulated options contract for bitcoin futures as well, that likely to add an extra feather to its product-line to its currently operating ‘physically-settled bitcoin futures contracts’. 

The CEO, Kelly Loeffler has clarified that the contracts were built as per the clients’ requirements, and the ICE Futures US self-certified the contract through the U.S. Commodity Futures Trading Commission (CFTC).

The bitcoin price trend has been struggling of late, BTCUSD price (at Coinbase) has plunged below $8k levels (refer above chart), currently trading at $7,536 levels with intensified selling momentum.