Bakkt Begins Testing Bitcoin Futures
By Luke Flowers – Cryptocurrency Speculator
Bakkt, the Bitcoin futures platform, starts testing new contracts.
The Intercontinental Exchange (ICE), almost a year after revealing its vision, is still awaiting regulatory approvals before the platform goes live. Though the firm has delayed the new market several times, the New York Stock Exchange's parent is carrying on with its plans to potentially offer the United States first physically settled Bitcoin futures.
Futures are a way to introduce liquidity, transparency and price tracking without the need for the investor to buy Bitcoin. Many different projects are trying to introduce Bitcoin Futures and there are other such as the Ethereum Futures market in development, allowing investors to speculate on the price without having to buy Ethereum.
Back in May, Bakkt announced that it would start testing Bitcoin contacts in July, later to confirm a start date of July 22nd. Testing commenced on this day which the exchange began conducting two different types of tests, one daily and the other a monthly contract.
Bakkt is attempting to list the futures that would then be traded through ICE Futures US and then cleared through ICE Clear US, which happens to be the parent company's clearinghouse. Those looking to buy Bitcoin futures will have greater reassurance when cashing out crypto contracts as the parent company is a well-established, reliable company.
As of now, it isn't clear what would be involved in the testing process and Bakkt wasn't ready to reply to a barrage of comments.
Bakkt is planning to offer US traders access to physically-settled Bitcoin futures contracts, which is different from the cash-settled futures contracts that Chicago exchanges Cboe and CME were offering at the end of 2017. Traders, with cash-settled contracts, can receive cash that is equal to the contract's value upon expiration. With a physically settled contract, they receive the underlying commodity, which in this case is Bitcoin so won’t need to buy Bitcoin after if they still want the exposure.
With its regulated product, Bakkt wishes to invite new institutional funding to the Bitcoin environment to attract investors of a wider market.
Don’t forget you can find a huge list of cryptocurrencies through our platform which are the ‘physical’ asset, so check in to buy crypto UK through your trusted cryptocurrency broker.