“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,” Bakkt COO Adam White wrote in the Medium post.
The physically-delivered Bitcoin futures was originally set to go live at the end of 2018 but has been set back by regulatory hurdles. Last month, Bakkt announced that it would begin testing in July, though it did not provide a specific date at the time. As the blog post reads:
“Subject to regulatory approval, Bakkt’s limited purpose trust company will serve as a qualified custodian for Bitcoin, will operate separately from ICE’s futures exchange, will be insured for $100M, and will have separate governance.”
What It Means for the Crypto Market
This launch is an important move for the entire industry as it will set a new standard for accessing cryptocurrency markets. At the moment, the participation of institutional investors in the digital currency market is still constrained due to a number of infrastructural and regulatory issues. This leads to lower liquidity, more modest trading volumes and less price transparency in comparison to those ones that exist in more well-established markets.
Nevertheless, Bakkt views its mission exactly in ensuring the development of reliable infrastructure in the digital assets markets. Namely, this infrastructure should create appropriate conditions for secure transactions. To reach this final goal, the team staying behind Bakkt has identified a set of core problems that prevent the markets from further growth.
In order to address these problems, it has offered a list of possible solutions based on the peculiarities of Bitcoin futures. The company wants to introduce the fully-regulated cryptocurrency products that will, among other benefits, decrease the current extremely high level of uncertainty and high transaction costs.
However, the range of advantages that Bakkt wants to bring to institutions is not limited to problem-solving tools only. The company has prepared a range of other features which include market maker incentive programs, block trades, integrations with regulated brokage platforms, a fee holiday at the end of the year which is said to boost trading activities.
“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,” Adam wrote at the end of its post.
Bakkt’s monthly, as well as daily, contracts will have a minimum price fluctuation of $2.50 per BTC. Trades will be available at $0.01 per Bitcoin. A listing cycle of a monthly contract may last for 12 months and for 70 consecutive eligible contract dates for a daily contract.
The date of the full launch of the platform has not been announced yet.