Bakkt has announced that it has got the green light from U.S Commodity Futures Trading System to launch bitcoin futures. Now Bakkt warehouse will provide custody bitcoin fo physically delivered bitcoin futures. The company announced to launch its new services on 23rd September. Kelly Loeffler announced that the Bakkt’s bitcoin futures would be exchange-traded on ICE Futures U.S and cleared on ICE Clear U.S.
Kelly wrote in a blog post that Bakkt Warehouse would provide regulated and secure custody of bitcoin that is protected by $125 million in insurance. She also added that to provide a trusted ecosystem, they will include an institutional compliance and anti-money laundering program. She believes that the current market is retail oriented, and they want to fill the gap between retail and institutional trading with their new service.
Bakkt initially intended to launch its futures contracts in December last year, but they had to postpone the launch many times since then because of regulatory reasons. Kelly added that Bakkt bitcoin futures contracts would not rely upon unregulated spot markets for settlement prices. She also mentioned that Bakkt Warehouse, which is part of Bakkt Trust Company, is built using the cyber and physical security protections that support the world’s most actively traded markets, including the NYSE.
After many delays, Bakkt finally looks positive to go ahead with the project this time. Kelly mentioned in her blog post that they are already preparing for the user testing. Some form the crypto community are still doubtful of the launch because of Bakkts’s history.
How would it affect the BTC price?
Bitcoin futures would allow big industries to enter the market which sounds good for the cryptocurrency, but according to many experts, this could mean a fall in the price of bitcoin as industrialist would want to buy the contracts in less cost. It can allow market manipulations as big players have the resources to so. Large institutional players would first want to suppress the price of BTC to accumulate it a discount.
When future trading started with gold in the 1970s, the price of gold in the initial two years went down by almost 50%. Futures trading was not the only factor, but according to experts, it played a massive role in that. It took 3 and a half years for gold to get to the price where it was before future trading started. If we go by what happened to gold after future trading started, bitcoin will see a downfall in its price and according to some reports, bitcoin’s price might even fall below at what it was in 2018.