Bakkt Brings Institutional Money To Bitcoin With July Test Date Of Futures Contract (#GotBitcoin?)

The Intercontinental Exchange’s pending bitcoin platform Bakkt plans to begin testing its two futures contracts on July 22 of this year. Bakkt Brings Institutional Money To Bitcoin With July Test Date Of Futures Contract (#GotBitcoin?)

In a blog post that likened Bakkt’s launch to the Apollo 11 moon landing, chief operating officer Adam White wrote Thursday that the platform will “initiate user acceptance testing” for its bitcoin futures contracts, which will be listed and traded by its parent company. Bakkt announced last month that it would begin testing in July, though it did not provide a specific date at the time.

In addition to the date, ICE provided new details for Bakkt’s monthly contract, as well as updated the contract specifications for its daily contract.

Both contracts will see a minimum price fluctuation of $2.50 per bitcoin (with each contract containing one bitcoin). Trades may be executed at $0.01 per bitcoin, with a listing cycle that can last for as long as 12 months (for the monthly contract) or 70 consecutive eligible contract dates (for the daily contract).

Final settlement for both contracts will be at the Bakkt Warehouse.

Stepping back, ICE announced last year that it would be launching physically-settled bitcoin futures contracts. Unlike cash-settled contracts, such as what CME Group offers, customers receive an actual bitcoin on the contract’s expiration, and not the fiat equivalent to bitcoin’s price.

On Thursday, White wrote that Bakkt’s mission is “ to support the development of trusted infrastructure for securely transacting in the new market for digital assets.”

The exchange initially announced potential launch dates last year and January of this year, though both were delayed due to a lack of regulatory approvals. The delay appears to stem in part from Bakkt’s plan to warehouse its own bitcoin and clear trades through the ICE clearinghouse.

Bakkt has not yet announced a final launch date.

The company first revealed last month it was self-certifying its futures contracts, which included a daily contract that was previously announced and a monthly contract that was not.

“This is no small step,” White wrote Thursday. “This launch will usher in a new standard for accessing crypto markets.”

He added:

“Compared to other markets, institutional participation in crypto remains constrained due to limitations like market infrastructure and regulatory certainty. This results in lower trading volumes, liquidity, and price transparency than more established markets like ICE’s Brent Crude futures contract, which has earned global trust in setting the world’s price of crude oil.”

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Putting Bakkt’s Bitcoin Futures To The Test

Setting a New Standard for Institutional Market Quality for Digital Assets

On July 20, 2019, the world marks the 50th anniversary of the first human landing on the Moon. When Neil Armstrong planted his foot on the lunar surface five decades earlier, he made good on what President John F. Kennedy promised would be America’s “moonshot bet.”

The “moonshot bet” has become a familiar term in business culture. Recently, Jeff Sprecher, the Chairman and CEO of Intercontinental Exchange, in his fourth quarter earnings conference call, termed ICE’s investment in Bakkt “a bit of a moonshot bet.” Practically speaking, however, Bakkt is a very “down to earth” solution to the grounded challenge of building trust in bitcoin and other digital assets for institutions and consumers alike.

Still, bitcoin price discovery, like a moonshot, requires diligent testing before launch. On July 22, two days after Apollo 11’s 50th anniversary, Bakkt will initiate user acceptance testing for its bitcoin futures listed and traded at ICE Futures U.S. and cleared at ICE Clear US.

This is no small step. This launch will usher in a new standard for accessing crypto markets. Compared to other markets, institutional participation in crypto remains constrained due to limitations like market infrastructure and regulatory certainty. This results in lower trading volumes, liquidity, and price transparency than more established markets like ICE’s Brent Crude futures contract, which has earned global trust in setting the world’s price of crude oil.

Recently, Bakkt announced that we’ll support the ICE Futures U.S. launch of daily and monthly margined futures for bitcoin by bringing regulated custody as part of the futures contract.

That’s our mission — to support the development of trusted infrastructure for securely transacting in the new market for digital assets. In advance of the start of Bakkt’s testing regimen, we wanted to share what we see as some of the benefits we’re bringing to help grow this market. Just as engineers in the 1960’s identified problems in planning a spacecraft’s lunar trajectory, we are working to meet today’s identifiable market risks with problem-solving solutions:

Along with these problem-solving solutions that are new to digital asset markets, Bakkt also brings all the other features that institutions would expect in a versatile and broadly accessible market, including: block trades; a fee holiday through the end of the year to encourage trading; market maker incentive programs to encourage liquid markets; and integrations with ISVs and regulated brokerage platforms.

None of this work is easy, fast, or without considerable cost. That said, we believe it will be worth the effort. Against the backdrop of a momentous anniversary of human ambition, we’re reminded of President Kennedy’s message to a Joint Session of Congress on May 25, 1961: “This nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the Earth.” NASA didn’t flinch from its challenge.

Bakkt may be a form of moonshot, but it’s grounded in an earthbound endeavor to support the future of finance and the adoption of blockchain technology. In its own way, Bakkt’s efforts to help institutions launch safely into this market is the right stuff for the future.

Get ready to trade the Bakkt Bitcoin (USD) Daily and Monthly Futures by contacting us at sales@bakkt.com

Ex-CFTC Chair ‘Crypto Dad’ Giancarlo Joins Digital Chamber Trade Group

“Crypto Dad” just can’t stay away.

Former Commodity Futures Trading Commission (CFTC) chairman J. Christopher Giancarlo has joined the advisory board to the Chamber of Digital Commerce, a trade group focused on blockchain and crypto policy in the U.S.

Giancarlo helmed the CFTC for two years, following a three-year stint as a commissioner with the agency. Under his watch, the CFTC allowed the first bitcoin futures products to enter the space.

Most famously, Giancarlo told the U.S. Senate Banking Committee that, in his view, “‘do no harm‘ is the right overarching approach” for the blockchain space. His recommended approach earned him the nickname “Crypto Dad” from the community, a moniker he has embraced.

In a statement Tuesday, he said “the Chamber is at the epicenter of this emerging field of technology that can only be described as a movement,” adding:

“I’m looking forward to joining this group of advisory board leaders, from many fields and areas of expertise, whom are already working to promote the adoption of this transformative technology. It is my hope that together we can streamline and modernize the regulatory environment and encourage further blockchain innovation.”

Perianne Boring, the Chamber’s founder and president, said in a statement that Giancarlo would add his “substantial knowledge” to the group’s board, citing his experience with the financial markets and his past efforts in “encouraging advancements in technology.”

“We are entering a new phase of blockchain advocacy,” she told CoinDesk. “As the world’s leaders are convening to discuss the future of the international financial and monetary system, crypto and blockchain are increasingly playing a key role in these discussions. Chris Giancarlo’s valuable expertise will be critical as we continue to move the industry forward.”

The Chamber, founded in 2014, recently celebrated its fifth birthday by inviting its members to meet with members of Congress and Congressional staffers to educate lawmakers about the potential uses and benefits of the technology.

In February, the group called on the U.S. government to develop a national framework for blockchain and cryptocurrency legislation.

The U.S. risks falling behind other nations if it does not, Boring has said in the past.

Since leaving the CFTC, Giancarlo has also joined the board of directors to the American Financial Exchange, an electronic interbank lending system.