Bakkt, which is hoping to become an international exchange hosting both fiat and cryptocurrencies and facilitating easier and global digital asset transactions and trades by different firms, has confirmed that they will on November 5 this year, launch physically delivered Bitcoin futures as their first product.
The product is yet to be reviewed or approved by SEC but according to plans, it will be traded against US dollar, Great British Pound, and the Euro and other fiat currencies with each contract valued at one Bitcoin. It will enable access for institutional investors via regulated market infrastructure. The product, according to a blog from the company, will be launched by ICE Futures U.S. and ICE Clear U.S. They will also be traded on the ICE’s electronic trading platform.
However, the company does not wish to offer margin trading. Backed by ICE, it is expected that inclusion of secure storage or custody for digital assets for large scale institutional investors will increase chances of approval by SEC because ICE has been doing this for a while. Lack of a major exchange providing these custody services is given as a reason for delays by SEC to approve Bitcoin backed ETF.
That was the major reason for rejecting the Winklevoss ETF last month which some feel was because there was not a US regulated exchange and there wasn’t US regulated custody. SolidX/VanEck proposal for "physically-backed bitcoin ETF that will be insured against loss or theft of bitcoin" was also delayed by SEC but it is also hoped that they could get a node end of this month.
Bakkt's Bitcoin futures will be different from many currently because it will use Bitcoin for every transaction conducted on its network, which may improve price discovery. SEC last week postponed a decision regarding pending Cboe's Bitcoin exchange-traded fund (ETF) application and asked for more comments on the same. The ETF by CBOE will be backed by secure holdings of bitcoin in the VanEck SolidX Bitcoin Trust, which will trade bitcoin on over-the-counter exchanges, both domestically and internationally.
Bakkt is one of the biggest news to happen in cryptocurrency space and hopes to help boost institutional, merchant and consumer participation in digital assets across various global markets and commerce. It also hopes to solve the problem of lack of ease of conversion of fiat to cryptocurrency and vice versa. This will improve spend-ability of cryptocurrency at many merchant locations and shops.
Ease of spend-ability of crypto and the conversion from fiat to cryptocurrency and vice versa are two great concerns when it comes to mass adoption. Already, many cryptocurrency firms are using different approaches to solve this problem, and one obvious approach is partnering with more and more legacy banks and financial systems.
For instance, Starbucks is a flagship retailer for the platform and hopes to develop practical applications that will let users convert digital assets into US dollars for use at Starbucks. The company may also apply the platform for its Mobile Pay that serves more than 15 million Starbucks Rewards members. Other partners include Microsoft and Boston Consulting Group.
The platform itself launches in November and some analysts say there will likely be a BTC breakout after approval of (an) ETFs and the launch of BaKKt. LedgerX is also reportedly looking forward to getting CTFC node for Ethereum derivatives on October 5.