- Bakkt has launched the testing phase of its Bitcoin futures contracts
- The firm is offering physically backed futures contracts to crypto investors
- Regulators like CFTC caused infamously long delays
The highly anticipated Bakkt Bitcoin Futures platform has officially begun testing live contracts. The firm will offer custody of digital assets to institutional crypto investors and users are already speculating how it will affect bitcoin’s price.
Daily and monthly Futures through BAKKT
User acceptance testing for bitcoin daily and monthly futures began on Monday, July 22, according to an official tweet from the International Exchange (ICE). According to the tweet, user acceptance testing for Bitcoin daily and monthly futures began Monday with participants from around the world. Bakkt’s official tweet stated:
“Today kicks off user acceptance testing @ICE_Markets for the Bakkt Bitcoin Daily & Monthly Futures contracts testing is proceeding as planned with participants from around the world.”
Bakkt has experienced several delayed and failed attempts to launch its bitcoin futures contract market and the successful launch marks a huge step forward. The firm made an announcement in May this year that it would finally start testing the bitcoin futures contract in July, and specifically July 22.
After acquiring DACC, Bakkt announced that it would test the Bitcoin futures contracts in July. A few weeks later, they provided a specific launch date, July 22nd. Bakkt COO Adam White stated in June:
“On July 22, two days after Apollo 11’s 50th anniversary, Bakkt will initiate user acceptance testing for its Bitcoin futures listed and traded at ICE Futures U.S. and cleared at ICE Clear US.”
Concern among regulators
Bakkt’s bitcoin futures, whose introduction the firm expects will help usher in more institutional participation in cryptocurrency markets, are physically delivered via a process called “warehousing,” which will supposedly augur well from a price discovery standpoint, but cause some concern among regulators.
After failed attempts and delayed dates to launch its Bitcoin futures contracts to the market, Bakkt is going to be testing today this new solution for larger investors. The delays regarding its launch were caused by regulators like the United States Commodity Futures Trading Commission (CFTC) investigated the platform’s compliance procedures and its possible effect on markets.
Last week, Fundstrat Global Advisors managing director and quant strategist Sam Doctor predicted the full launch of Bakkt futures trading. He said:
“There appears to be a critical mass of adopters ready to come on board on Day 1 of the Bakkt launch, with the sales team gaining traction among brokers, market makers, prop trading desks and liquidity providers.”
Bakkt is an affiliate of the New York Stock Exchange (NYSE) parent company Intercontinental Exchange (ICE). The first of its kind in regulated bitcoin markets, the derivatives will settle in-kind, paying out traders in bitcoin as opposed to in cash like the CME and CBOE’s own futures.