When moon? More like “When Bakkt?”
The answer to the latter question appears to be soon. After the forthcoming cryptocurrency platform and its associated bitcoin futures offering have been repeatedly pushed back in recent months, the exchange’s leadership have finalized a date for “user acceptance testing” of its bitcoin futures product: July 22nd.
Bakkt has generated considerable intrigue since its announcement last fall as a result of its high-profile backer, Intercontinental Exchange Inc. (ICE), which owns and operates the New York Stock Exchange (NYSE) among other major traditional exchanges throughout the globe.
The NYSE alone had a market capitalization over $28 trillion USD as of last summer. Some cryptoeconomy stakeholders argue that if ICE can help bring even a sliver of that industriousness around Bakkt’s services and products in the years ahead, the wider cryptocurrency space and its prospects are sure grow.
We’re setting a new standard for institutional market quality for digital assets https://t.co/KEqH5VzFVk
— Bakkt (@Bakkt) June 13, 2019
The launch of the Bakkt exchange, which will leverage cloud infrastructure from Microsoft and is designed to cater to both retail and and institutional investors, is still on the horizon. But the announced July 22nd test date for Bakkt’s bitcoin futures offering indicates that product, in the least, is getting close to its full release.
As bitcoin is akin to a digital commodity, bitcoin futures allow traders to make bets as to what the bitcoin price will be at a given time. Notably, Bakkt’s bitcoin futures will be “listed and traded at ICE Futures U.S. and cleared at ICE Clear US.,” the firm’s chief operating officer Adam White said in a Thursday blog post.
Concluding the test date announcement, the COO added that the exchange’s mission was to prepare as decentralized finance continued to march ahead:
“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.”
The update from White comes after reports broke back in April that the U.S. Commodity Futures Trading Commission (CFTC) had concerns at the time about how Bakkt was going to custody its physically-backed bitcoin futures. The watchdog apparently wanted more optimizations implemented.
A few days after that reporting, the COO revealed that ICE had acquired cryptocurrency custodian startup Digital Asset Custody Company (DACC) and rolled its team into Bakkt’s ranks, undoubtedly as a bid to shore up the CFTC’s aforementioned concerns.
Now, on the news of Bakkt’s bitcoin futures test date, it seems the DACC acquisition may have done the trick for accelerating the product’s release trajectory.
Bitcoin Futures Heating Up
The specter of bitcoin futures offerings is growing — at least if their rising popularity is any indication.
Earlier this month, the CFTC published data on CME Group’s bitcoin futures contracts that revealed almost 5,200 such contracts were outstanding between May 27th to June 3rd, the most active at once since the CME Group’s bitcoin futures first went live in December 2017.
CME bitcoin futures saw new records in both volume and open interest in May, adding over 200 new trading accounts
Average daily volume finished at more than 13,600 contracts, or ~$515 million in notional USD traded value, up 36% since April and over 250% year-over-year. pic.twitter.com/BUwOFCojVu
— Oliver Isaacs (@oliverzok) June 13, 2019
Even with its popularity on the rise, the arena just got a little less crowded, as Cboe Global Markets — which launched its own bitcoin futures offering around when CME Group did — chose not to renew its BTC futures back in March. CME’s product ultimately proved more popular,
Yet the competition will be on shortly. Bakkt’s bitcoin futures appear nigh per their aforementioned July test date. And Nasdaq — the company that backs the NASDAQ stock market — is reportedly in the middle of developing its own BTC futures offering.
As institutional-minded platforms like Fidelity Digital Assets, ErisX, and Bakkt continue to advance, bitcoin futures are undoubtedly set to become even more popular.