Backed by the Intercontinental Exchange (ICE), Bakkt has successfully launched its Bitcoin futures contracts on Monday (September 23rd 2019) after a year of delays and obtaining regulatory clarity. This further opens the gateway for institutions to enter the Bitcoin market, and perhaps the wider cryptocurrency markets in the future.
Unlike the other Bitcoin futures contracts that are cash-settled, Bakkt is offering physically-settled contracts. This means institutional buyers receive REAL Bitcoin when a contract expires – it’s the real deal!
Approximately an hour and a half between images, volume is still slowly increasing (differences highlighted below).
The build-up to the launch is hot news and has triggered immense curiosity into the implications it could have on the markets, especially with memories still being fresh of the 2017 launch of the Cboe and CME Group’s Bitcoin futures launch, which was one of the major triggers that pushed BTC to record levels of just under $20,000.
In contrary to that memorable price rally, the price remained timid today. Bitcoin briefly dipped under $10,000 during the launch of the new platform. With 18 Bitcoin in volume being traded in the first few hours, the volume has steadily increased throughout the day, currently standing at 56 Bitcoin and rising at the time of writing on the daily chart.
Patience is the Name of the Game: ICE and Bakkt are Thinking LONG-TERM! So Should We!
Commentators throughout the crypto community have already begun criticizing the amount of volume being traded, comparing today’s launch to the CME Group’s launch, and many in the space were anticipating a parabolic move in price upon launch.
The debate rages on crypto Twitter; Source: https://twitter.com/krugermacro/status/1175567382032592896
According to a recent Twitter poll, there are mixed opinions on the launch of the new futures contracts. Some have argued that progress is likely going to be slow and gradual for the time being due to the contracts being physically settled. Another key insight could be that institutions are moving in cautiously as they embrace Bitcoin.
Regardless of what people think, Bakkt CEO Kelly Loeffler has deemed today’s launch as an “important milestone” for digital assets.
In an official statement on Medium, the CEO discusses the importance of accurate price discovery for investors, with the futures contracts providing a trusted benchmark.
“These futures contracts now serve as benchmarks established by a trusted price discovery process upon which investors can rely.” – Bakkt CEO Statement
Manipulated price data has been a longstanding problem that has plagued the crypto markets for years. This COULD be one of the reasons Bakkt delayed its launch in the months prior to today.
Today’s cryptocurrency market that ICE and Bakkt are launching in is considerably calmer than the market Cboe and CME launched in during the bull market mania of 2017. This means we can more accurately observe the impact of these new physically-settled futures contracts on the digital asset market.
Slow and steady wins the race. Building a stable and trustworthy environment is critical for Bitcoin, and the next step for Bakkt as it continues making steady progress is the possible support for other cryptocurrencies. The only catch with that scenario is the respective altcoin will need to meet the same clarity that Bitcoin has now achieved…
“We’re starting with the basics: instilling trust through regulation and secure custody, and deploying products that are transparent and regulated to support their adoption. This commitment is reflected in our mission at Bakkt: Expanding access to the global economy by building trust in and unlocking the value of digital assets.” – Bakkt CEO Statement
This is not investment advice; please always do thorough research and only invest what you are willing to lose, especially in times of uncertainty.