Bakkt Announces September 23 Launch of Futures And Custody
Bakkt has announced the coming launch of its much-anticipated platform for daily and monthly futures in the United States in a blog post on Aug. 16. Having received approval from the necessary regulators, the launch is scheduled for Sept. 23. Bakkt Announces September 23 Launch of Futures And Custody Platform In US (#GotBitcoin?)
Bakkt’s physically delivered futures have been the subject of a great deal of anticipation, with the company initially announcing its launch August 2018 before being subject to repeated delays over compliance issues. Satisfying the Commodity Futures Trading Commission (CFTC) has proven particularly challenging. The company began testing in earnest on July 22, as Cointelegraph reported at the time.
Per the announcement, Bakkt has hosted numerous events in New York and Chicago — cities critical to the U.S. futures market. They have also sat down with regulators from the CFTC as well as the Securities and Exchange Commission (SEC).
Bakkt will be partnering with Intercontinental Exchange Futures U.S. and Intercontinental Exchange Clear U.S. to provide its futures contracts.
Institutional services and custody have been a growing market in crypto, with major U.S. exchange Coinbase announcing the addition of Xapo’s Institutions into its custodial operation last night. After the announcement, Coinbase CEO Brian Armstrong commented on the major rise in institutional clients for crypto services, saying:
“Whether institutions were going to adopt crypto or not was an open question about 12 months ago. I think it’s safe to say we now know the answer. We’re seeing $200-400M a week in new crypto deposits come in from institutional customers.”
Bakkt Clients Can Start Warehouse Deposits on Sept. 6
Bakkt clients will be able to start depositing their funds in the Bakkt Warehouse for physically delivered Bitcoin (BTC) futures starting Sept. 6.
Bakkt To Debut Futures Trading On Sept. 23
On Aug. 28, the much-anticipated crypto trading platform Bakkt announced on Twitter that its qualified custodian, Bakkt Warehouse, will begin offering storage of customer’s Bitcoin in early September.
Storage will start weeks before the scheduled launch of its platform for daily and monthly crypto futures in the United States on Sept. 23. The platform will enable physical delivery of Bitcoin with end-to-end regulated markets and custody.
The Bakkt Warehouse, a part of Bakkt Trust Company, was developed using the same cyber and physical security protections as New York Stock Exchange, which is also operated by Bakkt’s parent company Intercontinental Exchange.
Bakkt’s physically delivered futures have been the subject of much anticipation from the crypto community as the company faced multiple delays in launching the platform due to compliance issues.
Physically-Delivered Bitcoin Futures
A physically-delivered Bitcoin futures contract is a type of a contract where customers are given the actual cryptocurrency instead of a cash payment once the contract expires.
The fact that Bitcoin futures are physically settled on Bakkt, means that the party will receive delivery of a Bitcoin from Bakkt Warehouse when the contract expires.
In contrast, futures contracts at the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange are cash-settled and based off the price of Bitcoin at cryptocurrency exchanges.
Earlier today, Cointelegraph reported that CME’s Bitcoin futures hit a new lifetime record by netting an average daily volume of $515 million in May 2019.
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Bakkt Warehouse Launches Deposits And Withdrawals As Planned
Bakkt Warehouse, a qualified custodian of crypto trading platform Bakkt, is now accepting customer Bitcoin (BTC) deposits and withdrawals.
First Physical Btc Futures On The Way
As the company tweeted on Sept. 6, Bakkt Warehouse has officially launched in accordance with the plans revealed on Aug. 28.
The launch of Bakkt Warehouse comes as the company prepares to roll out its platform for Bitcoin daily and monthly futures in the United States on Sept. 23. The platform will enable two types of physically-delivered Bitcoin futures with end-to-end regulated markets and custody, as previously reported.
According to a Bloomberg report, Bakkt will be the first platform to offer physically-delivered Bitcoin futures if launched successfully. In contrast to the existing cash-settled Bitcoin futures offered by the Chicago Mercantile Exchange and the Chicago Board Options Exchange, Bakkt’s physically-settled futures will enable clients to receive payment in Bitcoin once the futures contract expires.
Once launched, trades will take place on the futures platform run by Bakkt’s parent company, the Intercontinental Exchange (ICE), while clearing will be settled through ICE Clear.
Meanwhile, custody will be operated by Bakkt Trust Company, which reportedly received a charter from the New York State Department of Financial Services to hold clients’ crypto funds in August 2019. In turn, Bakkt Warehouse will be moving Bitcoin from short positions to long positions at expiration, which will lead to the actual delivery of Bitcoin.
At press time, Bitcoin is nearling the $11,000 mark and is trading at $10,883, up 3.09% on the day, according to data from Coin360.
Bitcoin Deposited In Bakkt Warehouse Protected By $125M Insurance
All Bitcoin deposited at the Bakkt Warehouse is protected by a $125 million insurance policy, the company announced Sept. 9. Bakkt started accepting deposits and withdrawals Sept. 6, ahead of the proposed launch of its futures products on Sept. 23.
Everything Running Smoothly, And Now With Added Protection
It took Bakkt a lot of time and effort to gain regulatory certification for its upcoming daily and monthly physically-delivered bitcoin futures products. However, since approval was given things has been full-speed ahead.
Bakkt revealed a product launch date of Sept. 23, and announced that deposits in its freshly-certified custodial warehousing solution would begin on Sept. 6. Sure enough, this happened as planned.
News of the insurance policy covering client deposits, removes yet another concern for the institutional investors that Bakkt hopes to attract.
All Systems Prepared For Launch
If the launch is successful on Sept. 23, it will be the first bitcoin futures platform offering a physically-delivered product, which means institutional investors will be trading with actual Bitcoin.
Existing futures products from the Chicago Mercantile Exchange are cash-settled, whereas Bakkt clients will receive payment in Bitcoin once the futures contract expires.