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Physically-Settled Bitcoin Futures Contracts Ready To Be Launched After Regulatory Approval

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Investors will now be able to invest in physically-settled Bitcoin (BTC) futures through Bakkt. The platform has received regulatory approval and it will be launched on September 23, almost a month away from now. The information was released by Kelly Loeffler, the CEO of Bakkt, in a blog post a few hours ago. 

Bakkt Crypto Platform Ready To Be Launched

According to Kelly Loeffler, Bakkt’s contracts received the green light from the Commodity Futures Trading Commission (CFTC), and they are now in the user acceptance testing process. This would allow larger firms and institutions to enter the crypto market by purchasing physically-settled Bitcoin futures contracts. 

With the new approval by the New York State Department of Financial Services to create Bakkt Trust Company, the firm will be able to custody the funds of users and clients and provide  futures contracts services to them. 

The blog post released reads as follows:

“While much has been said about deficiencies in crypto markets, the advances being made in the digital asset ecosystem are significant in terms of participants, platforms and applications — not to mention the rapid pace of development that continues through bear and bull markets.”

At the moment, the cryptocurrency market is focused on retail investors. There are several companies that are offering services to smaller users and buyers, but not to institutions that require complex and more advanced services. This is why Bakkt is trying to bridge the gap for institutions to access this market and increase institutional involvement in the industry. 

Bakkt will start offering a regulated and secure qualified custodian for Bitcoin to support the futures contracts. The Bakkt Warehouse, part of the Bakkt Trust Company, has been built using the necessary security protection. 

At the same time, the company will not be providing price information from unregulated spot markets. Bakkt’s bitcoin futures will be exchange-traded on ICE Futures U.S. and cleared on ICE Clear US, regulated by the CFTC. Bakkt Warehouse provides regulated and secure custody of Bitcoin protected by $125 million in insurance. 

This is very bullish for Bitcoin and cryptocurrencies because it will provide regulatory clarity and security to the market. At the same time, Bakkt will become a globally accessible exchange in a market underserved by institutional-grade infrastructure. 

ETFs are also going to be very bullish for the industry if they are approved. If a Bitcoin ETF is approved in the coming months, the crypto market could experience an important influx of funds from large investors. 

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