- Bakkt says first investment product will be physically delivered Bitcoin futures.
- Upcoming Exchange will not allow margin trading.
- Bakkt will be a regulated ecosystem for institutional cryptocurrency traders.
Bakkt, the upcoming cryptocurrency exchange backed by the Intercontinental Exchange (ICE) has revealed that its first product will be in the form of physically delivered Bitcoin (BTC) futures traded against three leading fiat currencies. ICE, the parent company of the New York Stock Exchange (NYSE) made the fresh announcement via a Tuesday, September 25, 2018, official tweet. The company stated:
“Our first contracts will be physically delivered Bitcoin futures contracts versus fiat currencies, including USD, GBP, and EUR. For example, buying one USD/BTC futures contract will result in daily delivery of one Bitcoin into the customer’s account.”
Physical Bitcoin Futures Come into the Picture
This announcement confirms a previous one made in August that Bakkt will not be offering margin trading or use leverage with Bitcoin but will ensure that every transaction is completely collateralized; the company stated then it was not willing to “serve to create a paper claim on a real asset.” Bakkt plans to set sail with a 1-day physically delivered Bitcoin contract besides physical warehousing when the exchange launches later in November 2018.
The tweet has indicated to prospective investors on what they will be getting themselves into besides what they should expect in the form of returns on a daily basis. Bakkt was created as a platform to enable individual and institutional investors to buy, sell, spend and store digital currencies in a trustworthy, efficient, real-time and commercial manner. That platform will house a number of features that are supposed to make it easier to do all those things: commerce, trading, and warehousing under one roof.
A Potential Game Changer
Bakkt’s vote of confidence comes from the fact that it is backed the Intercontinental Exchange’s (ICE) financial market technology and infrastructure. ICE is the powerhouse that owns the New York Stock Exchange and a few other global marketplaces which are both valid and reliable. The idea behind Bakkt first come into the fore in August 2018 and they have set the official Launch for November 2018. In an earlier press release, Bakkt CEO who is also ICE’s Digital Assets head Kelly Loeffler said about the design of the platform it will:
“Serve as a scalable on-ramp for institutional, merchant and consumer participation in digital assets by promoting greater efficiency, security, and utility.”
The Bakkt team has so far been able to secure a number of partnerships within the retail, technology and consulting sectors including Microsoft, Boston Consulting Group and Starbucks to make sure they deliver on their promise.