Cryptocurrency Derivatives Series: Key Take-Aways of Bakkt BTC Physically-Settled Futures

Mr. Adam White, the COO of cryptocurrency platform Bakkt, had announced in Medium blog that the ICE-backed start-up would commence beta-testing for its much-anticipated Bitcoin futures contracts from July 22nd.

Bakkt has diligently initiated user acceptance testing for its bitcoin futures listed and traded at ICE Futures U.S. and cleared at ICE Clear US.

Bakkt’s collaboration with the ICE’s leading futures exchange and clearing infrastructure to bring physical delivery futures contracts to market participants in 30 countries.

The highly anticipated unveiling of Intercontinental Exchange’s (ICE) crypto exchange subsidiary, Bakkt’s project of the physically deliverable bitcoin futures contract, is all set to take-off.

They are now gearing up for the launch date for its Bitcoin (BTC) futures project in 3rdquarter owing to the pending of approval from the New York Department of Financial Services (NYDFS), as per a recent report by The Block.

On the back of these latest developments, Sam Doctor, who is a renowned strategist for the Fundstrat Global Advisors, has stated that the budding start-ups like Bakkt and LedgerX’s would be the luring factors for the institutional demand for Bitcoin and other cryptocurrencies. The start-up clarified through twitter handle about its intentions to unveil two futures contracts with daily and monthly settlement periods. The price discovery of these contracts would not depend on unregulated spot markets, with an objective of cut downthe apprehensions of wash trading. Bakkt’s new products would be operating contemplating prices discovered in their physical delivery contracts.

The mechanism is available for all the US-based investors with government IDs, whether they are institutional clients or HNIs. Most analysts reckon the advantages that these physically-settled futures contracts are exclusively meant for institutions in the crypto markets.

Although retail players are also showing interest in such options from the recent past, but the industry looks in for the institutions who are in the promisingplayers as they are major source of funding that is most likely to drive Bitcoin prices and overall crypto markets as a whole.