The Crypto sector has long been waiting for the launch of the Bitcoin Bakkt futures trading platform. This should finally happen on September 23rd. Within 48 hours of the great revelation, Bitcoin has increased by 10 percent.
The owner of the New York Stock Exchange, International Exchange, will finally start offering futures contracts paid in Bitcoin, starting September 23rd.
We have already reported that the ICE stated that it had obtained the authorization from the financial services department of the State of New York to hold digital currencies of investors.
The Bakkt exchange of the company will offer the contracts and hold the cryptocurrency. Futures contracts are all certified by the US Commodity Futures Trading Commission.
This announcement has pushed Bitcoin even more into the institutional investment sector, which in the past was not really eager, mainly due to its volatility and the absence of important government regulations that prevented the currency from keeping Wall Street interested.
In the press release, the managing director of Bakkt Kelly Loeffler stated that, although much has been said about the deficiencies in cryptocurrency markets, the progress made in the digital asset ecosystem is significant in terms of participants, platforms and applications. "Not to mention the rapid pace of development that continues through the bear and bull markets," the CEO added.
Bakkt will focus on digital resources and, with the help of his newly established Bakkt Trust Company, will be qualified to hold the Bitcoin custody tokens of traders.
Since it was founded in August 2018, the company has partnered with companies like Starbucks and Microsoft, and plans to offer both day futures and monthly contracts that pay in Bitcoins instead of US dollars.
Cryptocurrency analyst and trader Scott Melker says the Bakkt news is undoubtedly the most bullish event for institutional investors in the history of Bitcoin.
The @Bakkt the news is undoubtedly the most bullish event for institutional investors in the history of bitcoin. Futures delivered PHYSICALLY (require the holder to produce actual bitcoins or take delivery from the exchange) backed by the New York Stock Exchange. We are maturing.
– The Wolf Of All Streets (@scottmelker) 16 August 2019
Jake Chervinsky, a former securities litigation and general advisor for compound finance, has explained that the reason why Bakkt is important is because "it offers a way for large risk-averse institutions to buy and hold bitcoins through an end-to-end regulated system approved by CFTC and NYDFS, and supported by ICE's sterile reputation" .
The truth is that, since Bakkt announced the beginning of his work, Bitcoin has risen by $ 1,000 to $ 10.711,40 at the time of writing. As a financial analyst and technology journalist, Joseph Young tweeted:
I must say that, based on the bitcoin movement, it seems that most of Bakkt's launch had a price on the market (perhaps investors got tired).
Since Bakkt is physically resolved, after its launch, it will really show if there is a big question on the market or not.
– Joseph Young (@iamjosephyoung) 16 August 2019
But why the Bakkt opening will push the Bitcoin price further? First, we must remember that fixed-term contracts will be physically settled. At this time, futures contracts are settled in cash, which means that when the purchased contracts expire, market participants pay or receive the difference between the prices on maturity of legal currency futures, such as dollars.
The futures contracts settled in cash, on the other hand, do not affect the demand for Bitcoin because its participants are only buying a cryptocurrency display rather than buying the real currency.
This means that Bakkt will allow buyers' expectations for physical Bitcoin delivery. This also means that Bakkt must eliminate a large volume of BTCs from circulation while waiting for customer demand.
However, even if it looks like an exchange, there are some who think that Bakkt is primarily a custodian with real competitors like BitGo or Coinbase Custody.
For Bakkt, the forward contract could probably act as part of a broader attempt to make the regulated detection of prices possible.
Bakkt's general manager Adam White recently stated:
"What Bakkt basically believes is that price discovery will take place in an end-to-end regulated market. Much of that price discovery is taking place in the spot market, but it will switch to futures markets. "
Be that as it may, Bakkt will provide such a necessary platform for institutional investors to buy physical Bitcoins through its legally compliant system. This is a framework in which everyone will be able to negotiate with cryptocurrencies and use it as a payment solution.