- New Bakkt bitcoin options will launch on 9 December to cater to the rising customer demand
- ICE US regulates the Bakkt Bitcoin options through the Commodities Futures Trading Commission (CFTC)
- New contract to leverage the benchmark of their Bakkt Monthly Bitcoin futures contract
On 24 October 2019, Bakkt announced on Medium that on December 9, 2019, they would launch the first of its kind regulated options contract for bitcoin futures, as part of their effort to bring more trust and utility to digital assets.
Bakkt said that the launch is an example of many other regulated market products that they are developing for institutional investors as well as their customers and investors.
The launch follows their previous unveiling of Bakkt Bitcoin Futures contract one month ago, which has since gained popularity in the US, Europe, and Asia.
The Bakkt Bitcoin Options Contract
The Bitcoin Options Contract is certified by ICE Futures US, through CFTC. Bakkt stated that they had based the options contract on the benchmark of their Bakkt Monthly Bitcoin futures contract. The company stated:
“The new contract is based on customer feedback and is designed to hedge or gain bitcoin exposure, generate income, and offer cost and capital efficiencies.”
Key Features of Bakkt Bitcoin Options Contract
Bakkt said that to meet the needs of a regulated options contract, the company will leverage institutional-grade custody and benchmark future prices:
“Since launching the Bakkt bitcoin futures just one month ago, we’ve been working closely with market participants to build liquidity, create market transparency, and build an open interest.”
The Bakkt bitcoin options will feature key aspects including affordable fees, Capital efficiency, and cash settlement, European style option with reduced operational burdens, instant messaging, and block trades.
Rising Demand for Bitcoin Options Markets
Bakkt will launch its bitcoin options contract earlier than its biggest competitor, the CME Group, who announced that they would launch bitcoin options at the start of 2020. CME Group’s Global Head of Equity and Alternative Investment Products Tim McCourt said:
“Based on increased client demand and robust growth in our Bitcoin futures markets, we believe the launch of options will provide our clients with additional flexibility to trade and hedge their bitcoin price risk. These new products are designed to help institutions and professional traders to manage spot market bitcoin exposure as well as hedge bitcoin futures position in a regulated exchange environment.”
