The Intercontinental Exchange (ICE) disclosed its strategy to bring forth Bakkt’s a pioneering Bitcoin futures contract that involves physical settlement for the first time. tweet shared on Tuesday, September 25, 2018.
These Bitcoin futures contracts will be transacted in three major currencies—USD, GBP, and EUR—and designed to appeal to institutional investors that have been hesitant to enter the crypto market. Bakkt is offering a 'regulated ecosystem' to encourage such investments.
ICE stated in the tweet:
\"Our starting contracts will be for Bitcoin with physical delivery against fiat currencies like USD, GBP, and EUR. To illustrate, purchasing a USD/BTC futures contract will guarantee the daily receipt of one Bitcoin into the client’s account.\"
Ray of Hope for ETF
What sets Bitcoin futures apart from ETFs is the necessity for investors to physically hold the cryptocurrency, as opposed to just trading market-based claims.
To date, the SEC has turned down multiple ETF proposals, with experts hinting at regulatory constraints. However, Bakkt's approach, offering physically delivered BTC tokens, aims at tapping the same investor market.
Bakkt tackles core issues why ETFs faced rejection: trusted price formation and reliance on markets for futures and derivatives. CEO Kelly Loeffler wrote an informative piece to ease community worries. She expressed the goal to drive 'efficient price discovery' without offering margin or paper claims. post \"A fundamental aspect of price discovery is the actual delivery of the asset. Our mechanism ensures Bitcoin trades are fully collateralized and pre-funded. Therefore, our daily Bitcoin contracts won't involve margin, leverage, or paper claims, which supports market integrity and separates our services from others allowing those features.\"
Her statement reads:
Challenges Bitcoin Faces
Bakkt aims to overcome hurdles hindering cryptocurrency adoption by offering comprehensive solutions, including fraud monitoring and
tracking market transactions using advanced surveillance tools, mitigating malpractice within regulated markets. It also provides a trusted custodial service, encouraging institutional investors into the space. manipulation Moreover, Bakkt enhances transaction efficiency and volume beyond Bitcoin's current capacity, handling numerous transactions per second. This scalability could lead to numerous business and consumer applications, reducing trade costs and increasing efficiency globally.
The platform introduces a new avenue for established
entities to extend Bitcoin mutual funds and ETFs to pension schemes as highly controlled mainstream investment options. With Bakkt's reliability, hesitations about Bitcoin transactions should diminish. money managers A prominent Japanese exchange recently lost $60 million to a security breach, reminiscent of CoinCheck and Coinrail. Drawing on its foundation with ICE's regulated exchange experience, Bakkt is believed to fortify itself against fraud and market maneuvering.
Zaif In the UK, Jimmy has been closely monitoring blockchain's progress for years, optimistic about its promise to reform finance.
4Comments
It's intriguing, isn’t it? Through observing Bitcoin, I've gained insights into financial mechanics. Yet, mainstream financial media often seems less about reporting facts and more about molding perspectives and thus values. Still, large banks behaving as they do isn't surprising—I fault society for falling for the allure of 'mainstream adoption.'
In essence, this refers to actually buying and owning real Bitcoin, not just engaging with it as a financial derivative like other futures propositions.
Physical delivery of Bitcoins?
Bitcoin is a blockchain.
Does not exist in a physical form.
It is a settlement transaction
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