TL;DR: A popular meme in the ecosystem among some enthusiasts is When Institutional? Be they bitcoin ETFs, custody solutions, or massive exchanges embracing crypto, few are more anticipated than Bakkt. It has been the subject of rumor, seed rounds, hirings, setting dates and then pulling back for months now, in what some have cursed as a never-ending tease. Recently, CEO Kelly Loeffler announced the company’s “testing for bitcoin futures custody and trading [is] planned for July.”
Bakkt CEO Pegs July for Highly Anticipated Rollout
“Today, we’re pleased to update you on the launch of bitcoin futures contracts developed by Bakkt,” Loeffler explained, “in collaboration with ICE Futures U.S. and ICE Clear US. We’ve worked closely with the CFTC to develop contracts that both meet our customers’ needs for trading, transparency, and market certainty, and are also compliant with Federal regulations,” she assured.
ICE is the Intercontinental Exchange, owner of a dozen traditional exchanges around the world, including the New York Stock Exchange (NYSE), along with half that amount in central clearing houses. Its entrance into crypto has been met with equal parts skepticism, a co-opting of a trend some see as inevitable, and equal parts FOMO … others believing Bakkt brings gravitas and seriousness to the space.
On the same day of their announcement, 13 May 2019, the company also pointed to a 27 page filing with the US Commodities Futures Trading Commission (CFTC), hoping “bitcoin futures will be listed on a federally regulated futures exchange in the coming months.” User acceptance testing (UAT) will begin in July, Bakkt claimed, and they “expect to use UAT to ensure that customers have time to onboard and can test the trading and custody model we’ve built to their satisfaction.”
Perhaps the most newsworthy aspect of the company’s press release involves greater detail on their plans. Same-day market daily bitcoin futures along with a month version are in the works, of which they claim prices will be “discovered in our physical delivery contracts without relying on unregulated cash markets.” Of note as well is a $35 million stake the company is calling a “clearinghouse risk waterfall,” aligning their “interests for market integrity and safety with market participants.” They’re still hammering out specifics of their qualified custodian service integration for physical delivery and storage, however.
DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.
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