Bakkt to Start Offering Its Bitcoin Futures Contracts By July 2019
On Monday, May 13, Bakkt CEO Kelly Loeffler announced that the ICE’s crypto trading platform would start accepting the “User acceptance testing for bitcoin futures custody and trading” from July 2019.
In the official announcement, CEO Kelly Loeffler wrote: “In conjunction with our exchange and clearing partners at ICE, we’ll be working with our customers over the next several weeks to prepare for user acceptance testing (UAT) for futures and custody, which we expect to start in July”.
Since its announcement in August 2018, Bakkt has created huge hope within the crypto community. ICE’s Bakkt platform promises to bring digital currencies to daily while partnering with several global retailers worldwide.
Besides, Bakkt also plans to pull institutional players to the crypto spectrum while offering custodial solutions and futures contracts on its platform. Despite these plans, Bakkt is facing regulatory hurdles and is said to be closely working the U.S. Commodity Futures Trading Commission (CFTC) to sort matters out.
Before launching its Bitcoin futures in the market, Bakkt wants to make sure that it provides ultimate transparency and safety to its customers while simultaneously complying with the Federal regulations.
However, Bakkt hasn’t specified that exact date of launch. But Loeffler states that the Bakkt Bitcoin futures will “offer unique trading, security and risk management features”.
Furthermore, the price formation in the futures contracts shall be supported by proven tools to spot or detect any abusive trading practices such as wash trading. “That means that the settlement prices on ICE Futures U.S. will be based on prices discovered in our physical delivery contracts without relying on unregulated cash markets,” writes Loeffler.
To ensure its market integrity and safety with other crypto market participants, Bakkt will contribute “ $35 million into the clearinghouse risk waterfall”.
Also, Bakkt plans to offers physically-settled Bitcoin futures contracts. Meaning, upon expiry, traders will get physical delivery of Bitcoins into their Bakkt account. Bakkt will thus offer secure storage of Bitcoin through its integrated custodial service fulfilled by Bakkt’s custodian solution.
Furthermore, Bakkt notes that its custody solutions “will be supported by insurance, cybersecurity, and comprehensive compliance, including an anti-money-laundering program and blockchain analytics”.
While there have been several delays in the past to the launch of Bakkt Bitcoin Futures, we expect things to roll-up ahead quickly.