After two delays and 13 months of questions, the Intercontinental Exchange-backed bitcoin warehouse and futures contract facilitator is launching on 00:00 UTC Sept. 23. Its September 23 launch date has been heralded by many as bullish for BTC as it will enable institutional investors to dabble in the markets.
While news of Bakkt’s launch and intention to facilitate BTC futures trading broke over a year ago, the platform itself has seen numerous delays owing to regulatory concerns. On Aug. 16 of this year, Bakkt announced that the company had secured approval from the U.S. Commodity Futures Trading Commission (CFTC) and had scheduled today as the first day of trading.
As often noted, Bakkt’s futures will be physically settled, meaning buyers receive bitcoin at expiration, whereas the futures available since 2017 at the Chicago exchange CME Group are cash-settled – essentially side bets on the cryptocurrency’s price.
While Bakkt is also offering a 30-day bitcoin futures contract, the one-day version will essentially allow institutions to buy or sell bitcoin in a way that’s more familiar to them than the helter-skelter world of crypto exchanges.
As Lanre Sarumi, CEO of crypto derivatives exchange operator LevelTradingField, put it:
“The dailies make their offering like the cash market, but with the ability to short. That’s huge.”
The contract is “well-designed,” Sarumi added. “The basis to the cash market would be very tight. It’ll be interesting to see if it’s the lead or the follower. In theory the cash market should dictate the price of the derivatives [futures] market. In practice, it’s the other way around for a lot of commodities.”
For this reason, Sarumi said he believes the daily contract “will come out of the gate strong.”
Bakkt’s platform has been the subject of a great deal of speculation and anticipation. Many commentators believe that physically delivered futures trading of BTC represents a leap forward for institutional acceptance of Bitcoin in particular and crypto in general. Either way, the wait is almost over and a big move lies ahead for bitcoin next week when Bakkt gets off the launch pad.