Yesterday Intercontinental Exchange (ICE) announced the launch date for the cryptocurrency trading site Bakkt. The launch will take place on December 12, 2018; at the same time, trading in bitcoin futures contracts will be open at the site. The exchange is currently awaiting approval by the Commodity Futures Trading Commission (CFTC).
Bitcoin futures will be the first ICE product related to cryptocurrencies. Futures BTCs will be placed in a special “storage” for digital assets, ICE Digital Asset Warehouse. Contract clearing will be done by another subsidiary of ICE, ICE Clear US. This company formally owns the New York Stock Exchange (NYSE).
When buying a Bitcoin futures contract, Bakkt sends one Bitcoin to the customer’s account – as a means of physical settlement:
“Each futures contract establishes an obligation to pay one BTC from the stock of ICE Digital Asset Warehouse and will trade in dollar terms. Every day, as part of the normal working hours of the exchange, one contract will be put up for bidding, " -Stated in the ICE announcement
The Bakkt settlement mechanism is different from the bitcoin futures solutions CME and CBOE, which support this type of product in fiat currencies. This decision provoked criticism of Bakkt and accusations of using “hidden leverage”; Company representatives reacted to these statements as follows:
“The key element in establishing value is physical settlement. In particular, in the case of our decision, the purchase and sale of Bitcoins is fully secured or pre-funded. Thus, our bitcoin futures will not be traded at a premium, use leverage, or [later] be used as a paper claim to a real asset."
For the first time, ICE announced the opening of bitcoin futures trading and the establishment of Bakkt in August of this year. The platform was expected to start work in November; ICE did not mention the specific reasons for the transfer date.
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