The cryptocurrency trading platform announced a couple of months ago by the Intercontinental Exchange (ICE) is about ready to be launched. The Bakkt exchange, which is being put together through a collaborative effort involving ICE, Starbucks and Microsoft, has a target date of December 12, according to a notice (in pdf) on the ICE website from Monday.
On that day, Bakkt will introduce Bitcoin Core (BTC) futures contracts and will be settled by ICE Clear U.S., Inc., a division of ICE. According to the announcement, “Each futures contract calls for delivery of one bitcoin held in the Bakkt Digital Asset Warehouse, and will trade in U.S. dollar terms. One daily contract will be listed for trading each Exchange Business Day.”
Last month, ICE reiterated its intentions to launch the exchange, stating that the first contracts will be “physically delivered BTC futures contracts versus fiat currencies.” The contracts will be available against the U.S. dollar, the UK pound and the euro. ICE, the parent company of the New York Stock Exchange, had anticipated introducing the platform in November, but has had to push it back while it finished final tweaks.
ICE has no plans to introduce margin trading on the Bakkt platform. It has previously said that margin trading could be detrimental to crypto growth and could be a deterrent to market integrity. The absence of the trading option, according to ICE, is imperative to “advancing the promise of digital currencies.”
Cryptocurrency futures aren’t a new product. The Chicago Board Operations Exchange and the Chicago Mercantile Exchange jointly launched BTC futures last December; however, having another traditional financial institution such as ICE backing crypto will certainly go a long way to developing trust among mainstream investors.
It still remains to be seen how ICE’s involvement will move the markets. After the CBOE and the CME introduced their futures products, the price of BTC didn’t skyrocket as some had predicted. However, this is normal, according to the Federal Reserve Bank of San Francisco. In a letter it published this past summer, it said, “The rapid run-up and subsequent fall in the price after the introduction of futures does not appear to be a coincidence.” It further asserted that this “is consistent with trading behavior that typically accompanies the introduction of futures markets for an asset.”
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
The post Bakkt crypto trading platform to go live in December appeared first on Coingeek.
Intercontinental Exchange (ICE), the company behind the New York Stock Exchange and startup crypto platform Bakkt, has announced its first product for the Bakkt platform—physical crypto futures.
The crypto futures, mainly in BTC, will be available to be traded against three separate fiat currencies, the U.S. dollar, the GBP and the Euro, respectively. Designed to attract institutional investors, Bakkt promises a “regulated ecosystem” for investing in cryptocurrency products, which will debut with the launch of the physical futures.
Announcing the futures product, the company described on Twitter how this would work for investors, noting, “For example, buying one USD/BTC futures contract will result in daily delivery of one [BTC] into the customer’s account.”
Our first contracts will be physically delivered Bitcoin futures contracts versus fiat currencies, including USD, GBP and EUR. For example, buying one USD/BTC futures contract will result in daily delivery of one Bitcoin into the customer’s account.
— Bakkt (@Bakkt) September 25, 2018
Crucially, the product is differentiated from exchange-traded funds (ETFs), which would enable investors to trade cryptocurrency markets without physically taking ownership of underlying cryptocurrency.
A number of crypto ETF proposals have been considered by the U.S. Securities and Exchange Commission (SEC) in recent months, despite none thus far being granted listing approval.
Several proposals remain under consideration by the SEC, but analysts believe the SEC cannot yet give approval to an ETF in the current regulatory climate. Physical crypto futures would aim to service the same market of institutional investors, but crucially delivers physical BTC tokens to investors, rather than a paper claim, as with ETFs.
Bakkt’s Tuesday announcement follows on from a statement of confirmation in August, when the firm clarified its position on margin trading, saying that they wouldn’t “serve to create a paper claim on a real asset.”
The platform has until now come in for criticism for the lack of apparent details around its offering, or how it would aim to attract institutional investors to the crypto space as envisaged. Bakkt’s most recent announcement will most likely go some way towards assuaging these concerns, as it gears up for its launch in November. If successful, the platform could provide a mechanism for institutional investors to take exposure to crypto markets, in the absence of an approved crypto ETF.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
The post Bakkt platform’s first offering? Physical crypto futures appeared first on Coingeek.
