Almost one year after CME and CBOE launched their own bitcoin futures products, the Intercontinental Exchange, which owns the New York Stock Exchange (NSE), has announced that it would launch Bitcoin Futures on Baktt platform on the 12th of December.
The platform is advertised as an open-source, neutral platform that lets customers to easily, safely and efficiently purchase, sell, store, and spend digital assets.
Also, it comes with the promise of daily future contracts. According to the announcement, the Bakkt Daily Bitcoin Futures Contract will enable investors to trade “a physically regulated daily futures contract for bitcoin.” This means that these contracts, unlike their CBOE and CME counterparts, will be settled in actual bitcoin. One daily contract will be listed for trading every day, according to the announcement.
“Each futures contract calls for delivery of one bitcoin held in the Bakkt Digital Asset Warehouse and will trade in U.S. dollar terms. One daily contract will be listed for trading each Exchange Business Day,” the press release goes.
Each bitcoin is held by Bakkt LLC in what the exchange calls its “Digital Asset Warehouse ” and each contract is settled by the ICE Clear US.
The minimum price fluctuation will be set at $2.5. However, Block Trade may be executed at $0.01 per BTC.
Bakkt will Offer Futures against USD, Euro, and GDP
Bakkt is supposed to offer a regulated environment for institutional players that want to jump on the crypto bandwagon and stay in compliance with regulatory requirements. In addition, Bakkt will offer viable futures against three major fiat currencies (USD, Euro and GBP) as opposed to the rival platforms. CBOE and CME have non-deliverable futures.
Jeffrey C. Sprecher, ICE’s founder, president and CEO explained:
“In bringing regulated, connected infrastructure together with institutional and consumer applications for digital assets, we aim to build confidence in the asset class on a global scale, consistent with our track record of bringing transparency and trust to previously unregulated markets.”
Bakkt will not, however, support margin trading for its BTC contract. This ban on margin, leverage, and cash settlement will help to promote market integrity and stability.