BAKKT has officially launched. The Bitcoin Futures Platform backed by ICE, Intercontinental Exchange owner of the NYSE, open its door with the first trade executed at 8:02 pm ET.
This is a milestone for the crypto industry. For the first time, the traditional world of finance is stepping into crypto and demonstrates that more and more Wall Street institutions are taking a close look at digital currencies.
The platform has seen many delays over regulatory compliance since its original announced last year. In July, they initiated user acceptance testing aiming to set a new standard for institutional market quality for digital assets:
“This is no small step. This launch will usher in a new standard for accessing crypto markets. Compared to other markets, institutional participation in crypto remains constrained due to limitations like market infrastructure and regulatory certainty” COO Adam White said.
Two Futures Contracts Offered
Bakkt offers two different futures contracts: a daily settlement bitcoin future and a monthly futures contract. The futures are physically settled and will deliver actual bitcoin rather than the cash equivalent, whereas the futures available since 2017 at the Chicago exchange CME Group are cash-settled. This is a key difference because it will cause an increasing and true demand for Bitcoin.
Bakkt itself is not an exchange, but rather will take advantage of its parent firm’s existing infrastructure. The contract will be traded on ICE Futures U.S. while the Bakkt Warehouse will provide custody services. This offers customers unprecedented regulatory clarity and security alongside a regulated, globally accessible exchange in a market underserved by institutional-grade infrastructure.
At first, the platform will provide only Bitcoin but will consider additional contracts as CEO Kelly Loeffler said last year:
“Bitcoin today accounts for over half of total crypto market capitalization and has been deemed to be a commodity, and its derivatives are regulated in the US by the CFTC. We’ll consider additional contracts as the landscape evolves and as we receive additional customer feedback about what they want and need.”
Wall Street has arrived and this is just the first step.