The wait is over: Bakkt’s bitcoin futures are being launched next month.
Since Intercontinental Exchange (ICE), the powerhouse behind the NYSE and other financial giants, unveiled its intentions in August 2018 to create the Bakkt crypto exchange and physically-settled bitcoin futures, the crypto world has been all eyes and ears on Bakkt.
Over the past year, Bakkt has been meticulous in refining its plans, pushing back timelines to ensure a flawless launch. Now, the final stages are in place, CEO Kelly Loeffler confirmed on August 16th, noting the firm is prepared to debut its bitcoin futures on September 23rd.
The news coincides with a significant move by the New York State Department of Financial Services (NYDFS), also known for its BitLicense initiatives in the crypto sphere. granted Bakkt a banking charter Enabling the Bakkt Trust Company to operate within the state.
This trust company will act as the approved custodian for the Bakkt Warehouse, safeguarding the bitcoin that underpins its tangible futures contracts. Initially, two contract types will be available: one monitored monthly and another daily. Trading will occur on the ICE Futures US platform, settling on ICE Clear US.
Loeffler remarked, \"This development supplies clients with unparalleled regulatory clarity and security, offering a regulated and globally accessed exchange in a market lacking institutional-grade infrastructure.\"
Recent updates have confirmed that Bakkt's launch was a matter of timing. The company made significant strides in July, and ICE's executives recently affirmed that Bakkt is close to the finish line. started user acceptance testing \"Awaiting final regulatory endorsements, our intention is to present our physically-settled bitcoin futures in the upcoming days,\" asserted ICE CEO Jeffrey Sprecher during the August 1st earnings discussion.
In the spring, rumors circulated about the U.S. Commodity Futures Trading Commission (CFTC) scrutinizing how Bakkt intended to manage bitcoin custody for its futures. The commission allegedly suggested further optimization of Bakkt's custody plans.
Getting the CFTC Onboard
Since then, Bakkt seems to have addressed these proposals. The CFTC has not pursued this matter further and subsequently accepted Bakkt's self-certification approach. qualms Yet, the CFTC will undoubtedly act if necessary. On the recent LedgerX matter, the company declared the launch of a physically-settled bitcoin futures product for U.S. clients on July 31st.
However, things didn't pan out as they’d hoped. The next day, the CFTC instructed LedgerX to refrain from tweeting about the product launch, citing the absence of Commission approval. This was later clarified by CFTC’s communications chief, Michael Short, via CoinDesk.
The situation escalated when LedgerX's CEO, Paul Chou, mentioned potentially suing the Commission for \"breach of duty,\" among other issues. Moreover, the firm's press representative resigned around this turbulent period.
If LedgerX had successfully launched its physically-settled bitcoin futures on July 31st, it would have edged out Bakkt and others like ErisX.
Historically, we've seen bitcoin futures from CME Group and Cboe, although those were cash-settled. Bakkt's physical delivery approach could revolutionize the interest in bitcoin as the BTC must be acquired and handed over to the contract holder upon completion.
Given these contracts will operate daily and monthly, there could be an increased demand for bitcoin starting September 23rd.
Bullish for Bitcoin?
With LedgerX and ErisX not trailing far behind, the next few months promise heightened institutional involvement in the OG cryptocurrency.
William M. Peaster is a seasoned writer and editor focusing on Ethereum, Dai, and Bitcoin. His work is featured in Blockonomi, Binance Academy, Bitsonline, among others. He’s enthusiastic about smart contracts, DAOs, dApps, and the Lightning Network. He's also learning Solidity! Connect with him on Telegram at @wmpeaster.
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