Cryptocurrency Startup Bakkt, founded by the New York Stock Exchange owner Intercontinental Exchange (ICE), has begun testing Bitcoin Futures, as per its Official Tweet on July 22nd. This occurs just a year after launching and announcing its plans to provide a physically-baked Bitcoin Futures contract to big investors.
After a lot of failed tries and delayed dates to release its Bitcoin Futures market to the world, Bakkt is going to test the new solution with large investors. In May 2019, Bakkt declared that it was going to begin testing Bitcoin Futures in July. After a few weeks, the firm declared the official launch date, July 22nd.
As per the tweet, the latest offering comes with two contract options: a daily Bitcoin futures contract that enables customers to transact on the same-day market and a monthly Bitcoin futures contract. Both the contracts will be listed and available for trade on ICE Futures U.S. Exchange along with 12 global exchanges including the NYSE.
At the time of testing, each contract on Bakkt's platform will have one bitcoin with a minimum tick size for trading. The contracts will be cleared via ICE Clear U.S.
The company raised $182.5 million in December and stated that future contracts and various other services are developed to allow customers and institutions to buy, sell, and store digital assets without any issues.
“Formed with the purpose of bringing trust, efficiency, and commerce to digital assets, Bakkt seeks to develop open technology to connect existing market and merchant infrastructure to the blockchain,” the firm said at that time.
In short, they want to ensure that the systems responded as expected, that all processes were correctly applied and they will try to identify errors and other issues which can be fixed before launching the official network.
Bakkt's Bitcoin futures are physically delivered through a process known as warehousing, that might predict price well, however, may face regulatory issues.
Bakkt has faced some challenges about the launch of Bitcoin Futures due to regulators like the United States Commodity Futures Trading Commission which examined the platform's compliance processes and its possible effect on markets.
Before a week, Managing Director and Quant strategist at the Fundstrat Global Advisors, Sam Doctor, expected that the full futures trading on Bakkt will release in this quarter. He said,
“There appears to be a critical mass of adopters ready to come on board on Day 1 of the Bakkt launch, with the sales team gaining traction among brokers, market makers, prop trading desks and liquidity providers.”
Bakkt's is not the first firm to provide Bitcoin Futures Contracts. The Chicago Mercantile Exchange is providing bitcoin futures contracts since December 2017 besides Chicago Board Options Exchange (CBOE). CBOE has closed bitcoin futures contracts in March.