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Bakkt to Launch Cash-Settled Bitcoin Futures on December 9

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Bakkt

Bakkt

The cryptocurrency industry has come a long way from the days when it used to be tough for people to buy tokens online and hence, the emergence of Bitcoin futures did not come as a massive surprise for most market watchers. So what does newly-created crypto exchange Bakkt have in store? Let’s dig in.

Key Expansion

A few months back, Bakkt announced that it was going to launch a Bitcoin future product that could be settled in cash. That announcement naturally caused a lot of enthusiasm in the crypto sphere, and today, the company made another important announcement. On Friday, Bakkt announced that it is all set to launch its freshly minted product on December 9, 2019.

Bakkt is the cryptocurrency venture that is owned by the Intercontinental Exchange (ICE), and the announcement came from the latter. The new product in question has been christened the Bakkt Bitcoin Cash Settled Monthly Futures and is going to be offered by ICE Futures Singapore. The clearing duties will be taken up by ICE Cleat Singapore.

Major Milestone for Bakkt

In this regard, it should be noted that both these entities are regulated by the Monetary Authority of Singapore. The launch of the Bitcoin futures product is going to be a major milestone for Bakkt and also for the crypto sphere in general.

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The Chief Operating Officer and President of both ICE Clear and ICE Futures Singapore, Lucas Schmeddes, commented on the product: “Our new cash-settled futures contract will offer investors in Asia and around the world a convenient, capital-efficient way to gain or hedge exposure in bitcoin markets.”

Ultimately, the launch of such a cash-settled Bitcoin futures product is an attempt from the company to tap into institutional money. Considering the fact that Singapore is one of the biggest financial hubs in the world, it is perhaps a prudent move from Bakkt to centralize the offering in the city-state.

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Analyst Predicts Bakkt Will Build Trust in Crypto Markets

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Bakkt

Bakkt

Prominent analyst Tom Lee believes the launch of Bakkt will help build trust towards crypto trading among institutional investors.

Lee, a renowned Bitcoin bull and co-founder of the research firm Fundstrat, tweeted his enthusiasm for the long-awaited crypto services platformI am very positive on @Bakkt and its ability to improve trust with institutions to crypto.” Bakkt is owned by the Intercontinental Exchange (ICE) and goes live on September 23, having already launched its crypto warehouse service, which saw over $1 billion USD worth of Bitcoin deposited in one day.

Many involved parties in the world of crypto are of the belief that Bakkt will have a substantial impact on the future of cryptocurrency. If the platform functions as planned, it will provide traders with a secure and monitored exchange on which to trade Bitcoin. With Bakkt futures, traders will be able to channel their payments and guarantee their Bitcoin will be delivered through the same ICE protocols that protect contracts traded by oil companies. The platform will also employ the same cybersecurity measures used on the New York Stock Exchange.

Bakkt was first unveiled over a year ago with ICE initially hoping to launch it in December 2018. However, the platform was faced with a series of regulatory delays that led to the launch being delayed until now. ICE announced in May that it had self-certified its futures contracts and in July began user acceptance testing to ensure that users could communicate with Bakkt’s infrastructure, paving the way for the exchange to begin taking on customers.

>> Ripple Shuns Securities Question: Dismisses XRP Lawsuit

Not everyone is as bullish about Bakkt as Lee, after a recent Twitter poll by Morgan Creek Digital co-founder Anthony Pompliano showed an almost even split of 3,500 votes on whether it would lead to an increase, decrease, or no movement for the price of Bitcoin. Some of the bigger skeptics believe that Bakkt could be used by institutions to short the price of Bitcoin, similar to how CME’s futures were shorted before the Bitcoin collapse in January 2018.

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Bakkt Futures Trade Volume Soars 800% After Slow Start

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Bakkt

Bakkt

The Bakkt Futures trading volume for Bitcoin (BTC) has gained almost 800% in just one day after a slow start to life for the long-awaited futures contract trading platform headed by the Intercontinental Exchange (ICE).

Bakkt Volume Reaches All-Time High

A bot account on Twitter, which tracks the number of contracts traded on Bakkt, reported this morning that 224 BTC futures were traded on August 9, an eye-watering increase of 796% from the previous day. October 8’s volume of 25 BTC was coincidentally the lowest figure recorded since the platform went live on September 22. However, Bakkt’s volume is still a considerable distance off its closest rival, the Chicago-based CME Group, but it is a sign of better things to come.

Sluggish Start

The launch of Bakkt was arguably the most highly anticipated event in the crypto world this year. However, the platform underwhelmed massively in its first week of trading, with just 623 futures contracts being exchanged for a total value of just over $5 million USD. In comparison, CME traded over 4,000 contracts on September 27 alone, at a total value of $165 million USD. Bakkt had been touted as an entry point for legacy financial institutions into crypto trading, given its close associations with legacy institutions like the New York Stock Exchange.

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Bakkt and Bitcoin Closely Linked

Naturally, trading activity on Bakkt is closely linked to Bitcoin’s value and vice versa. The slow uptake of the platform coincided with a downward spiral in BTC value, as it crashed from over the $10,000 USD mark to below $8,000 USD during Bakkt’s opening weekend, with many analysts blaming the exchange’s poor launch. However, the roles have reversed, and now Bitcoin is firmly in the driving seat. With BTC’s value rallying over the last few days, it’s no surprise to see activity on Bakkt soar.

It’s still early days for the trading platform, but today’s activity clearly shows a new relationship in crypto that will be curious to watch the next time BTC takes one of its wild swings as we all know it is prone to.

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Bakkt Hires PayPal and Google Veteran as Chief Product Officer

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Bakkt

Bakkt

Bitcoin futures exchange Bakkt has a new chief product officer. Announced via Medium earlier today, the exchange has added Mike Blandina to its team.

Bakkt Hires New CPO

In previous years, Blandina has worked at PayPal where he served as head of payments and credit engineering. He has also been director of engineering for Google Wallet.

In most recent years, Blandina was chief technology officer and product and engineering at OneMarket. CEO of Bakkt Kelly Loeffler wrote in the blog post:

“As our CPO, Mike will lead our efforts to converge a trusted ecosystem for digital assets with payments use cases, two elements of Bakkt that help bring real-world applications to bitcoin and other cryptocurrencies.”

Development

Bakkt is still awaiting regulatory approval in order to launch. It has faced multiple delays already with the initial launch expected back in November. However, in Loeffler’s posting, she said that “race day is approaching.” This comment has led some to wonder if the team has more clarity on its regulatory situation that it has yet to disclose.

She wrote further:

“As a former marathoner, this point in time recalls the stage in the training regimen when you’re putting in long runs with your training team […] there is more work to be done […] I’m proud to be going the distance with this growing team and of the culture we are building, while bringing digital assets into the mainstream economy.”

What is Bakkt?

Bakkt wants to offer a federally regulated market for Bitcoin, transforming Bitcoin into a trusted global currency with broad usage.

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Its main goal is to make Bitcoin a secure offering for the biggest global financial institutions that currently shun it. Bakkt is looking to create a path for these major money managers to offer Bitcoin pension funds, mutual funds, and ETFs as highly regulated, mainstream investments.

Approval

As stated, Bakkt is still waiting on approval from the US Commodity Futures Trading Commission (CFTC) to list its Bitcoin futures contract. One major consideration for the CFTC is that Bakkt’s proposal would see it warehousing its own Bitcoin. This may be one cause for delay.

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Bakkt’s Bitcoin Futures Goes Live

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Bitcoin futures

Bitcoin futures

Over the past few years, the Bitcoin futures ecosystem has grown at a remarkable pace, and it is something that is surely going to stay for years to come. Initially, these futures contracts had been launched by a handful of exchanges, but over the past year or so, the number has increased considerably.

Futures Trade

In a development that will come as another massive boost to the Bitcoin and cryptocurrency ecosystem, the New York Stock Exchange’s owners, ICE, through its crypto exchange Bakkt has decided to launch futures contracts that will pay out traders in Bitcoins. The launch has gone through, and trading has already started in this new security. The very first trade was completed on Sunday.

Over the years, it has been noted by many experts that mainstream investors are often hesitant about investing in cryptocurrencies despite having an interest in them. The NYSE launched the new Bitcoin futures contract with the sole purpose of tapping into such investors. Intercontinental Exchange (ICE), which is the owner of the NYSE, introduced the security in its futures exchange on Sunday. The firm launch through its crypto exchange Bakkt, which is currently one of the best known and innovative cryptocurrency exchanges in the world.

>> Analyst Predicts Bakkt Will Build Trust in Crypto Markets

The ultimate aim of many individuals in the crypto space is to ensure that retail investors and institutional investors find it worthwhile to invest in Bitcoin. Trading in cryptocurrencies and paying with them is perhaps the best place to start when it comes to attracting them. According to reports, this was the primary motivation behind the introduction of this product.

Over the past months, it has become abundantly clear that institutions are becoming more and more interested in Bitcoin as well as in the larger crypto space. If that is the case, then it is only natural that products are being introduced that could help bring them in and the introduction of Bitcoin futures is a step in the right direction.

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Bakkt Bitcoin Options Trading Volume for Last Week was Just Zero

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Bakkt

Bakkt

Bakkt, the highly touted cryptocurrency exchange founded by the Intercontinental Exchange, saw zero Bitcoin options traded last week as it continues its hugely underwhelming start to life.

The Bitcoin futures exchange, governed by the company behind the New York Stock Exchange, was billed as a gateway for institutional investors to get in on the world of crypto trading given its close associations with established financial institutions. However, the pre-launch excitement failed to translate into activity as Bakkt traded just 623 futures contracts in the first week of launch in late September. Volume did start to pick up pace in November with monthly trading breaking the US$10 million mark.

However, according to data from Skew, Bakkt has seen no trading for its options in the last 10 days. As the weekends aren’t counted, the last activity registered took place on January 17, when 20 Bitcoin options changed hands. Bakkt’s closest rival, the Chicago Mercantile Exchange (CME), has fared considerably better in recent weeks since rolling out its Bitcoin options on January 13, with 55 contracts (about US$2.37 million in volume) traded on its first day, rising to 120 (US$5.25 million) by the end of the week.

Bakkt’s physically settled futures contracts, which were launched in December, were also met with underwhelming volumes in the early days—a fact that was immediately unfavorably compared with the fiat-settled BTC futures on CME, which first went to market in December 2017.

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“The activity on CME has been on the rise lately and outgrowing BTC. Open Interest is at approximately $240 million at CME. This is nearly $100 million more than last time Bitcoin was around the same price. The volume on CME is also way higher than in October, and has now been touching the area between $500-$700 million several times this year,” said a recent report by Arcane Research, suggesting that it is gaining an edge over Bakkt as the preferred platform among institutional investors.

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Bakkt to Launch Institutional Bitcoin Custody Services

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Bakkt

Bakkt

Bakkt, the crypt subsidiary of the Intercontinental Exchange, has announced that it will begin holding the Bitcoin assets of its institutional investors, which was one of the most sought-after services of the platform prior to its launch in September.

Launch of Bakkt Warehouse

Upon launch, Bakkt initially only offered custody services to customers who were trading its Bitcoin futures contracts but has now received approval from the New York Department of Financial Services (NYDFS) to store all Bitcoin assets of its customers in the “Bakkt Warehouse.” Pantera Capital, Galaxy Digital, and Tagomi have already signed on as initial customers, with other major firms expected to join over the next few weeks.

Bakkt COO Adam White described custodial services as “a critical link … in the institutional adoption of bitcoin.” He added that “our relationship with Intercontinental Exchange (NYSE: ICE), a Fortune 500 company that owns and operates the market infrastructure upon which the world’s largest financial institutions already rely, enables us to uniquely address client needs in the digital asset custody space.”

Bitcoin Futures Trading Picks Up Pace

Bakkt has been heralded as a landmark arrival in the crypto space due to its close links with legacy institutions, like the New York Stock Exchange, which it hoped would provide a gateway into crypto trading for institutional investors. However, the platform has endured a slow start to life. With just 623 futures contracts being traded in the first week, for a total value of just over $5 million USD, it appeared as though the platform was a massive flop.

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The rollout of new services and the recent Bitcoin movement look to have stimulated an increase in activity for Bakkt. Over the weekend, the platform registered the largest single-day trading volume of its monthly Bitcoin futures contracts. The volume hit approximately $15.33 million USD on Friday, passing its previous high of $10.25 million USD on October 25. The total volume of Bakkt’s monthly Bitcoin futures now stands at $106.74 million USD since its launch on September 23.

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Bakkt Futures Trading Volumes Continue to Grow—But There’s a Catch

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Bakkt

Bakkt

Bakkt futures trading volume hit a record high of 4,269 BTC in a single day; however, very little Bitcoin has actually been physically settled on the exchange.

The launch of the futures trading exchange from the Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, was one of the most highly anticipated events on the 2019 crypto calendar. However, Bakkt got off to a sluggish start and traded only 623 futures contracts in the first week of launch in late September. Volume has started to pick up pace in recent weeks, hitting ~$37.45 million on Wednesday, passing its previous high of ~$19.96 million on November 22.

The interesting thing about Bakkt’s platform is that its futures are physically settled, meaning all trades are settled in Bitcoin rather than the cash equivalent. The catch is that very little Bitcoin has actually been settled by the exchange. According to trader Alex Krüger, in the months of October and November, Bakkt has delivered just 32 BTC, worth $242,000 at today’s prices, for its monthly futures.

Bakkt’s physically settled futures contracts are considered a revolutionary concept for the future of Bitcoin as it means institutional investors will end up holding Bitcoin in their portfolios rather than the cash equivalent, meaning real crypto adoption on Wall Street. “The more regulated volume, the better. Bakkt’s growth is very positive. Yet keep present Bakkt is not that different from the CME. It is almost entirely paper trading,” said Kruger.

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Bakkt will launch cash-settled futures on December 9 in an effort to get closer to its biggest rival, the Chicago Mercantile Exchange (CME). The CME has offered Bitcoin futures for nearly two years, and in Q3 of this year, it averaged 5,534 contracts per day, equal to 27,670 Bitcoin, worth $289 million at the time. However, CME settles its contracts with fiat currency, a direction in which Bakkt appears to be heading.

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Bakkt Announces Bitcoin Futures Launch Date in July

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Bakkt

Bakkt

As Bitcoin (BTC) holds resistance above $8,100 USD, more positive news has arrived to help its case. Intercontinental Exchange’s (ICE) cryptocurrency platform, Bakkt, is to begin testing its first product: physically-delivered Bitcoin futures.

The date for launch is just over one month from now, July 22nd.

Bakkt Announces First Project Launch

In a blog posted earlier today, Bakkt chief operating officer Adam White wrote:

“On July 22, two days after Apollo 11’s 50th anniversary, Bakkt will initiate user acceptance testing for its bitcoin futures listed and traded at ICE Futures U.S. and cleared at ICE Clear US.”

He furthered:

“This is no small step. This launch will usher in a new standard for accessing crypto markets. Compared to other markets, institutional participation in crypto remains constrained due to limitations like market infrastructure and regulatory certainty.”

Bakkt’s Bitcoin futures offering has seen multiple delays due to regulatory compliance. It was first announced in August 2018, and investors have been eagerly awaiting its arrival since.

In addition to announcing the date, ICE provided new details regarding Bakkt’s monthly contract, as well as specifications for its daily contract.

The key details are as follows:

  • Each contract will contain one Bitcoin. And both monthly and daily contracts will see a minimum price fluctuation of $2.50 per Bitcoin.
  • Trades may be executed at $0.01 per Bitcoin and can list for as long as 12 months for monthly contracts or 70 consecutive days for daily contracts.

Final contract settlements for both contracts will occur at the Bakkt Warehouse.

Bakkt Versus Others

As stated, ICE first announced that it would be launching physically-settled Bitcoin futures contracts in August 2018.

>> Ethereum (ETH) Soars 8%, Outperforms the Broader Crypto Market

Bakkt’s futures differ from other futures out there. For example, CME Group offers cash-settled contracts as does CBOE. However, Bakkt customers receive an actual Bitcoin on the contract’s expiration and not the fiat equivalent to Bitcoin’s price.

Business in Bitcoin futures has been busy; CME Group showed record high volume in May.

However, the original Bitcoin futures provider, CBOE, will cease offering contracts once its final contracts settle this month.

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Bakkt to Acquire Loyalty Program Provider Bridge2 Solutions

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Bakkt

Bakkt

Bakkt has announced that it will acquire loyalty program provider Bridge2 Solutions in a move that could open up a trillion-dollar market for the fledgling crypto exchange, according to the CEO of its parent company, the Intercontinental Exchange (ICE).

Bridge2 is a loyalty rewards platform for merchants and financial institutions with a combined total of $60 billion worth of reward points, according to Fortune. Bakkt intends to leverage Bridge2’s existing merchant relationships to build out its own consumer app. Bridge2 also operates a pilot project called Loyalty Pay, which, when integrated with Bakkt, will allow merchants to link payment processes directly to the Bakkt app, therefore removing a 2.5% interchange fee charged by banks.

Jeffrey Sprecher, CEO of Bakkt’s parent company ICE, said during its earnings call on Thursday, “the next big hurdle for the company will be getting that app into consumer hands and we will be looking at consumer adoption more than revenue or expense. Fortunately, that company is not a big drain on us … we have a lot of financial flexibility now from the company given it has a revenue stream both from trading and from operation of all these rewards programs.”

Bakkt intends to launch the app in the first half of 2020.

The announcement comes as Bakkt prepares to enter the second phase of growth, one that is aimed at expanding consumer adoption, following a hugely underwhelming first few months of operation. Last week, it was reported that the exchange saw exactly zero Bitcoin options traded; prior to that, the last activity reported was on January 17 when 20 options changed hands.

>> Bitcoin Cash (BCH) Gains Momentum, Soars 16% on High Volume

Bakkt’s physically settled futures contracts, which were launched in December, were also met with underwhelming volumes in the early days—a fact that was immediately unfavorably compared with the fiat-settled BTC futures on closest rival the Chicago Mercantile Exchange (CME), which first went to market in December 2017.

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