The wait is over: Bakkt’s bitcoin futures are being launched next month.
Ever since ICE, the powerhouse behind the NYSE among other financial exchanges, declared its interest in creating Bakkt along with offering physically-settled Bitcoin futures back in August of 2018, the entire crypto community has kept a keen eye on it.
Bakkt's timeline hit a few speed bumps over the year as they wanted everything to be just right instead of rushing. But now, they're on the home stretch—CEO Kelly Loeffler confirmed in an August 16th blog post that the green light has been given for a September 23rd launch of its Bitcoin futures.
This comes on the very day the NYDFS—widely known for establishing the BitLicense— granted Bakkt a banking charter gave the nod for the operation of Bakkt Trust Company within the state.
Bakkt Trust Company is tasked with being the reliable custodian for Bakkt Warehouse, entrusted with securing the Bitcoin that backs its physical delivery futures. Initially, two contract options are available: one tracking the monthly Bitcoin price and another doing so daily. These futures are set to be traded on ICE Futures US with settlements occurring on ICE Clear US.
According to Loeffler's announcement on Friday, customers can now experience an unmatched blend of regulatory transparency and safety through a regulated exchange that's accessible worldwide—something the institutional-level infrastructure market has been missing.
Signs have been pointing towards Bakkt's impending rollout. Just last July, the company took significant strides forward, and ICE's leadership mentioned soon after that Bakkt's debut was imminent. started user acceptance testing ICE chief Jeff Sprecher expressed during an August 1st earnings call that, pending final regulatory approvals, their physically-settled Bitcoin futures are on the verge of being launched very soon.
Earlier in the year, concerns emerged from reports of the CFTC's scrutiny over Bakkt's Bitcoin custody plans for its futures. The CFTC allegedly urged Bakkt for further refinement.
Getting the CFTC Onboard
Since then, it appears Bakkt has addressed the CFTC's concerns. Ultimately, the CFTC didn't push the matter further and acknowledged Bakkt's self-certification process. qualms However, the CFTC isn't shy about applying pressure when necessary. Take the LedgerX incident for instance. On July 31st, LedgerX claimed to have launched their physically-delivered Bitcoin futures in the U.S.
But the reality turned out differently: the very next day, the CFTC demanded LedgerX retract tweets about the mismanaged rollout citing lack of Commission approval, as confirmed by CFTC spokesperson Michael Short to CoinDesk.
The situation escalated when LedgerX CEO Paul Chou considered legal action against the CFTC for alleged duty failures, leading even the company's press rep to step down.
Had LedgerX succeeded in bringing its physically-delivered Bitcoin futures to market on July 31st, it would have beaten not just Bakkt but also other rivals like ErisX.
The CME Group and Cboe provided Bitcoin futures previously, but only in cash-settled form. Bakkt's approach of settling Bitcoin in its physical form could significantly boost the demand for BTC, as the actual asset needs transferring upon contract conclusion.
These contracts, set for daily and monthly execution starting on September 23rd and beyond, may potentially exert new upward pressure on Bitcoin demand.
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William M. Peaster is a seasoned writer and editor, focusing on Ethereum, Dai, and Bitcoin within the cryptoeconomy. He's been featured in Blockonomi, Binance Academy, Bitsonline, and more. He enjoys exploring smart contracts, DAOs, dApps, and the Lightning Network, and is in the midst of learning Solidity! Connect with him on Telegram at @wmpeaster.
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