Bakkt Launches Physically Delivered Bitcoin ( BTC ) Futures


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On Sep. 23, Bakkt will launch physically delivered Bitcoin BTC ) futures. Does that mean the firm is about to become the first end-to-end regulated cryptocurrency exchange with this kind of offer?

Let’s investigate. To encourage the participation of institutions in Bitcoin, in 2018, Bakkt announced their plans to address such well-known issues as AML/KYC, security breaches, lack of regulation, a volatile asset price, etc.

Now, with fraudulent trading gapped and collateral in place, Bakkt is ready to launch since they have received all the regulatory approvals needed.

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Time will tell if Bakkt will be able to tackle all the challenges that arise when working with a new digital asset class, such as a physically delivered Bitcoin futures contract.

The value of this offer might be compared with that of gold. When Bakkt’s Bitcoin Futures expires, the customers will receive the actual king coin instead of a cash payment. That being said, it’s an ultimate breakthrough in the niche.

There will be two types of futures in place. Namely, a daily futures and a monthly futures. This concept, though, begs the following question, if the futures is physically delivered, where are they going to store Bitcoin? Now, the place called the Bakkt Warehouse was already discussed in media many times, but here are just a few key takeaways.

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It will be both, an online and air-gapped digital storage distributed across the globe. Plus, the Bakkt systems algorithmically balance between both warm and cold storage tiers to minimize risks associated with warm storage.

Bakkt has raised $182.5 million from backers, including Microsoft, and also received support from regulators, which has pushed the main competitors into the shadow.

However, such top dogs as LedgerX and TD Ameritrade-backed ErisX compete for the niche, too. They just haven’t finalized their processes yet.

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