Bakkt’s physically settled bitcoin (BTC) futures trading has finally gone live. Trading started at 00:00 UTC on September 23 on the Intercontinental Exchange (ICE). This launch has seen Bakkt become the first platform of its kind to get the approval of US watchdogs.
According to a report, this launch will offer bitcoin traders a new trading option. The initial news of Bakkt’s intention to facilitate BTC futures trading broke more than a year ago. At that time, the platform had prepared to launch trading in January this year. However, the launch faced a lot of delays because of regulatory concerns from several US watchdogs including the CFTC.
Eight months after the proposed launch date, Bakkt unveiled that it had won the approval of the CFTC. In its announcement, the firm also unveiled that trading would begin today. True to its word, the firm did not disappoint.
After trading started, Bakkt took to Twitter to say,
The first Bakkt Bitcoin Futures trade was executed at 8:02pm ET at a price of $10,115
— Bakkt (@Bakkt) September 23, 2019
Building the Rails for Onboarding Institutional Investors
Reportedly, Bakkt’s BTC futures trading launch has seen the platform become a top choice for institutional investors that aim to dip their toes in BTC through a federally-regulated platform. Tom Lee, a crypto analyst pointed out that this launch will usher in the much-anticipated wave of institutional investments into the crypto market.
— Thomas Lee (@fundstrat) September 20, 2019
In a previous interview, Kelly Loeffler, Bakkt’s CEO said,
The funds that trade on our exchanges expressed to us that they don’t want to deal in today’s unregulated markets, and want end-to-end federal oversight, on the level of the NYSE, to feel safe trading in Bitcoin,
In the same interview, the founder and CEO of ICE, Jeff Sprecher noted that he could not say for sure that investors are ready to jump into BTC futures trading just yet. According to him, “it’s not demand yet, it’s intense curiosity,”.
He added that,
It’s the sense that money managers want to be at the front of this train and not left out. The day-to-day news covers Bitcoin when the prices goes way up or way down, but underneath we see sophisticated people investing in infrastructure and compliance that’s unrelated to the price. But they won’t use that infrastructure, there won’t be true global acceptance, until we can build out the rails in a regulated manner.
Changing the BTC Futures Trading Sector
Bakkt’s launch of BTC futures trading is set to revolutionize the BTC futures trading space. While other platforms like CME and CBOE offer BTC futures trading, their trades are cash-settled. With Bakkt, clients will get BTC rather than its cash equivalent upon the expiration of contracts.
At the moment, the platform is offering daily and monthly trading of physically settled BTC futures. Bakkt’s Bitcoin warehouse will be responsible for processing these trades. Reportedly, this warehouse has been up and running since early-September.
Do you think Bakkt’s launch will onboard a wave of institutional investors as analysts anticipate? Let us know in the comments below.