As of November 20th 2018, the launch of Bakkt Bitcoin (USD) Daily Futures Contract trading has been pushed to January 24, 2019. Besides the delay, Bakkt CEO Kelly Loeffler announced Coinbase’s former VP as the new Bakkt COO, as well as a new insurance agreement for bitcoin kept in Bakkt’s cold storage.
BAKKT Delayed Until Early 2019
With Bitcoin dropping below $4,500 in mid-November 2018, many have looked to the highly anticipated Bakkt product as a good sign of bringing institutional investors into the cryptocurrency industry. Originally scheduled to go live December 12, BAKKT has now been delayed by over a month.
Intercontinental Exchange (ICE), owner of the New York Stock Exchange (NYSE), has officially announced BAKKT’s delay, with a tentative launch date scheduled for early 2019.
Bakkt’s new launch date is still subject to successful customer onboarding and regulatory approval. According to Bakkt CEO Kelly Loeffler, her team is working closely with the Commodity Futures Trading Commission (CFTC), the regulatory body for futures trading in the United States.
Recent Developments Made by BAKKT
Loeffler had additional announcements concerning Bakkt’s development.
First, Adam White has joined as COO. White, a graduate of the Harvard Business School, has spent the last five years working for Coinbase. Initially, he worked as a director, and later as vice president and general manager.
Second, Bakkt has obtained insurance for the bitcoin that it safeguards in cold storage. They are also in the process of securing insurance for its own warm wallet— part of the Bakkt Warehouse architecture.
Such progress, says Loeffler, demonstrates Bakkt’s priority of delivering an institutional grade warehouse solution.
The Details of BAKKT Explained
The Bakkt Bitcoin (USD) futures contract is a physically-settled daily futures contract for bitcoin held in Bakkt’s own warehouse and cleared by ICE. Every futures contract will call for the delivery of one bitcoin held in Bakkt’s warehouse, and will trade in terms of USD.
Further specifications are as follows:
- Description: A physically settled daily futures contract for bitcoin held in Bakkt Warehouse
- Contract Symbol: BTC
- Contract Size: 1 Bitcoin
- Price Quotation: US Dollars per bitcoin, to two decimal places
- Minimum Price Movement: $2.50 per bitcoin ($2.50 per contract). Block Trades may be executed at $0.01 per bitcoin ($0.01 per contract).
- Daily Price Limit: None
- Eligible Contract Dates: Every exchange business day
- Listing Cycle: One contract date will be listed each business day
- Settlement: Physical delivery
- Delivery Location: Bakkt Warehouse
- Last Trading Day: 6:00pm EPT on the business day of contract date
- Last/Only Delivery Day: Equal to the daily contract date
- Trading hours: 8:00pm to 6:00pm, preopen at 7:55pm (all times in EPT)
- Non-Screen Trade Types: Block Trades permitted
- Block Trade Minimum Quantity: 10 lots
- NCR, RL and IPL Levels: NCR: 50.00, RL: 150.00, IPL: 300.00, 5 second recalculation periods
- Exchange and Clearing Fees: $0.50 per side for all trade types
- Daily Settlement Window: 4:58pm to 5:00pm EPT
- Position Limit: 100,000 lots in any Contract Date
- Listing Exchange: ICE Futures U.S.
- Clearing Venue: ICE Clear US
Bakkt ultimately aims to bring institutional investors into the cryptocurrency space by offering the first physically-settled crypto futures product on a legitimate platform. CBOE’s futures product is cash-settled, meaning no bitcoins are transferred upon contract expiration.
Others hold that security tokens provide the necessary protection to bring institutional investors into the cryptocurrency realm.
With the crypto market in its current state, many are hopeful that both Bakkt and security tokens will bring added volume to the blockchain industry and restore the larger cryptocurrency market.
What do you think of Bakkt’s Bitcoin futures product? Is the delay a sign of any serious concern? We want to know what you think in the comments below.
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