The cryptocurrency industry is abuzz with excitement. At the center of attention is Bakkt, the cryptocurrency venture owned by NYSE parent company Intercontinental Exchange. It is expected that this new platform will offer Bitcoin futures trading. If things go according to plan, that regulatory approval could happen as early as next week.
Bakkt Creates Very High Expectations
The launch of Intercontinental Exchange’s cryptocurrency venture can be a game changer. Bakkt, as this platform is called, bridges the gap between Bitcoin and institutional traders. One of its main products comes in the form of Bitcoin futures contracts. An interesting decision, especially when considering how other service providers struggle for traction in this department.
It is no secret Bakkt’s officials have been meeting with regulators. CFTC officials keep a close eye on this new project and its alleged plans in the cryptocurrency industry. Gaining regulatory approval is one of the top priorities for this company moving forward. One aspect of the platform that needs to be approved is the launch of a Bitcoin Daily Futures Contract settled in US Dollars.
Pending regulatory approval, these contracts will begin trading on December 12th. The waiting game associated with regulatory approval can take anywhere from weeks to months. Sources close to the matter now claim the futures contract may be launched a lot sooner. A launch next week is not out of the question at this stage.
A Unique Take on Bitcoin Futures
Bakkt is entering a market which seemingly struggles for traction. Neither CBOE nor CME has seen any real success in this regard. Bakkt aims to put a different spin on this tried and tested business model. They offer a physically-settled future instead of a more traditional cash-settled offering.
This different approach affects how contracts are paid out to investors. When the futures contract expires, traders are paid in Bitcoin, rather than cash. This will only happen when the trader has a profit to be paid out. It is difficult to predict if this model will be more or less successful compared to the more traditional model.
The trading of Bakkt’s Bitcoin futures will be supported by DV Trading. This Chicago-based trading provider is the first to offer exposure to these new products. Goldman Sachs is, allegedly, also keeping an eye on the Bakkt platform. This has not been officially confirmed by the institution at this stage.
Will Bakkt obtain regulatory approval next week? Can its Bitcoin futures trading services fare better than those at CBOE or CME? Let us know in the comments below.
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