Bakkt cash-settled bitcoin futures contracts launched

https cryptopotato com bakkt launches the first cftc regulated option on bitcoin and cash settled futures

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Bakkt cash-settled bitcoin futures contracts are now live on the platform. The Intercontinental Exchange’s renowned bitcoin futures trading platform has launched its most awaited cash-settled Bitcoin options and futures.

Institutional investors have lapped up this opportunity to trade in crypto futures and options realm. The platform has observed a marked increase in the trading volume in the past week alone.

Bakkt cash-settled bitcoin futures contracts means no more bitcoin buying

Chief Operating Officer of Bakkt Adam White, announced the launch of Bitcoin futures contract that are cash-settled. Earlier, the platform offered physically-delivered Bitcoin futures that promised to pay the user in bitcoins at the end of the expiry period. However, cash-settled futures contracts provide the user with cash at the contract expiry date.

Singapore will be the first destination to offer these new contracts. This Asian exchange will provide the trading facility to the international as well as regional traders to trade in Bitcoin’s options and futures space with no need to purchase the underlying asset, i.e. bitcoin. The settlement price is dependent on Bakkt’s benchmark product, i.e. bitcoin futures contract that is physically delivered.

Regulated monthly bitcoin options are gaining popularity

The platform earlier launched monthly bitcoin options that have become quite popular recently. Interestingly, this product has the distinction of being approved by the United States Commodity and Futures Trading Commission (CFTC). Bakkt cash-settled bitcoin futures contracts will further add to this success story.

The settlement occurs on two days before the actual U.S. ICE Futures. Moreover, a regulated market is the base for price discovery, meaning there’s zero correlation with the unregulated spot market of the bitcoin. Theoretically, this move will certainly boost the overall profits of the Bakkt.

Over the past few months, Bakkt has seen a consistent rise in trading volume as well as profits earned. The primary product portfolio of this exchange is geared towards the institutional investor, which involved substantial trading volumes. No wonder the Bakkt cash-settled bitcoin futures contracts are aimed at such mammoth trading giants. Also, it is facing stiff competition from the CME Group.

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Gurpreet Thind

Gurpreet Thind is pursuing Masters in Electrical Engineering at University of Ottawa. His scholarly interests include IT, computer languages and cryptocurrencies. With a special interest in blockchain powered architectures, he seeks to explore the societal impact of digital currencies as finance of the future. He is passionate about learning new languages, cultures and social media.

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