Bakkt Exchange Cleared to Launch on September 23
The physical delivery futures will add another layer to Bitcoin (BTC) mainstream adoption.
The Bakkt Bitcoin futures exchange has been cleared for an official launch of trading on September 23, announced the market operator. The contracts for daily and montly futures are already established, and the upcoming launch will also present the unique custodial services of Bakkt.
The Bakkt exchange noted that in the past years, digital asset markets have shown significant growth, and development continues. However, the market operator sees the current investment opportunities as optimized for small-scale investors. Bakkt intends to bridge the gap and reach out to large-scale institutional investors.
Whether concerns relate to a lack of liquidity, market quality and regulation, or issues with reliability, fees, and operational risks, we are addressing these challenges with a transparent offering,” explained the team.
The Bakkt futures will not rely on spot markets for price discovery, to avoid some of the volatility inherent in BTC prices, which may move by hundreds of dollars within hours. The futures will be carried by the ICE Futures U.S. and will be cleared by ICE Clear US. In addition to the added security of Bakkt Warehouse, the markets are pooling a guarantee fund of $35 million. Additionally, Bakkt Warehouse has insured the BTC assets for $125 million.
Bakkt will continue its acceptance testing with a small pool of traders until the official launch in September. Unlike the CME futures, which rely on cash settlement, Bakkt will transfer actual BTC, potentially taking coins out of circulation to specifically trade on Bakkt.
“Providing a trusted ecosystem is our first objective. To do that we are setting a higher standard, including an institutional compliance and anti-money laundering program, settlement prices that are distinct from unregulated spot prices, comprehensive market oversight, a guaranty fund contribution and insurance,” Bakkt announced.
BTC market prices are currently set by trading on Asian exchanges, with a rather slim dollar-based market. BTC traded around $10,696.028 on Monday, recovering after a recent dip toward the $9,500 level. BTC prices are highly unpredictable, erasing as much as $2,000 within days, and recovering just as fast.