Article By Abhimanyu Krishnan
Cryptocurrency startup Bakkt, heralded by many as the gatekeeper to wider cryptocurrency adoption, has announced that it will bring its Bitcoin futures trading into operation from December 12, 2018, subject to regulatory approval. The news has been met with excitement, following much anticipation from the crypto community about when the operation would precisely begin.
A notice released on October 22 reveals the launch date, with the listed details offering no surprises as far as the specifics of trading are concerned.
The notice reads:
ICE Futures U.S., Inc. will list the new Bakkt Bitcoin (USD) Daily Futures Contract for trading on Wednesday, December 12, 20181 . The Bakkt Bitcoin (USD) Daily Futures Contract is a physically-settled daily futures contract for bitcoin held in Bakkt LLC, ICE’s Digital Asset Warehouse, and will be cleared by ICE Clear US, Inc. Each futures contract calls for delivery of one bitcoin held in the Bakkt Digital Asset Warehouse, and will trade in U.S. dollar terms. One daily contract will be listed for trading each Exchange Business Day.
Financial publication The Block, working with an anonymous source, first reported that the operation would begin on December 12.
Run by the Intercontinental Exchange (ICE), which also owns the New York Stock Exchange (NYSE), the Bakkt startup is backed by the likes of Microsoft and Starbucks. The trading contract, executed against the US Dollar, Pound Sterling and Euro, will offer a regulated and accessible way for the wider yet-untapped investor base to enter the cryptocurrency market.
Several institutional players have entered the cryptocurrency market in the past months, though they have done so tentatively and dealing primarily with Bitcoin.
Bakkt Could Bring the Cryptocurrency Market into a New Phase
The Bakkt platform has investors in a feverish state because of the tangible impact it could have in opening up the market.
Stakeholder familiarity with the platform and procedures would greatly lower the barrier of entry for those hesitant about the cryptocurrency market because of its technical complexitiy.
However, Bakkt will not offer margin trading, to align with “the need for trusted price formation,” with CEO Kelly Loeffler saying:
Specifically, with our solution, the buying and selling of Bitcoin is fully collateralized or pre-funded. As such, our new daily Bitcoin contract will not be traded on margin, use leverage, or serve to create a paper claim on a real asset. This supports market integrity and differentiates our effort from existing futures and crypto exchanges which allow for margin, leverage and cash settlement.
That said, there are those who are wary of the arrival of institutional investment, believing that they will usurp the market and create “Wall Street 2.0,” as Dogecoin founder Jackson Palmer put it.
This is why I never understand people getting excited about ETFs, Bakkt, etc. Goodbye to decentralized peer-to-peer cash. Hello to Wall Street 2.0.Jackson Palmer
✔@ummjacksonReplying to @lgreyesl
The institutionalization of cryptocurrency will heavily re-centralize both power structures and token distribution. So you can say goodbye to much of the original vision for the technology.
Certainly, there are concerns that the introduction of big banks could sully the market to the point where they have may gain undesirable control, but opposition to their entry could also stunt the market’s ability to grow.
As this emerging technology forms a new economic market, regulators, lawmakers, innovators and consumers will all have to collaborate to create a system that distributes power evenly.