Bakkt Launches Physically Settled Bitcoin Futures

Intercontinental exchange-owned Bakkt has finally gone live today, after months of delays and speculation. Institutional investors can now invest in a regulated Bitcoin product through its physically settled Bitcoin futures. Unlike futures products offered by the likes of CME which are cash-settled, contract buyers on Bakkt receive Bitcoin after expiration.

Bakkt’s Bitcoin Futures contracts expire after a day and the Bitcoin is delivered on the second business dat after the contract’s date. While Bakkt also offers 30-day futures contracts, the one-day contract settlement period will feel more familiar to cryptocurrency investors.

CEO Kelly Loeffler published a blog stating that the launch is an important milestone for the industry. She said:

“With today’s successful launch of the Bakkt Bitcoin Futures contracts, we have taken an important step toward bringing trusted infrastructure to digital assets. As institutions enter this emerging asset class, they will continue to look to secure infrastructure and the regulatory certainty that it provides. Importantly, these futures contracts now serve as benchmarks established by a trusted price discovery process upon which investors can rely.”

No Impact on the Market

Despite the launch generating a lot of excitement in the crypto circles, the launch of Bakkt did not set the market on fire. Bitcoin continued to remain flat, trading at around $9920 at the time of writing. While it is generally accepted that Bitcoin futures contracts have impacted the Bitcoin markets, the impact of Bakkt futures will have to be examined in the coming days.

Crypto influencer Ari paul tweeted that the product may scale up more gradually since it is physical. He added that “with CME futures, anyone with the right FCM (Futures Commission Merchant) could immediately trade on launch”

At the time of writing, 29 Bitcoins were traded on Bakkt’s platform.

Leave a Reply

Your email address will not be published. Required fields are marked *