• Magdalena Gołębiewska

Crypto goes up because of bakkt Bitcoin futures

Updated: Aug 20, 2019

  • Bitcoin has risen by $1,000 since Friday’s announcement by Bakkt exchange that it will be launching physically-settled bitcoin futures on Sept. 23.

  • The price rise has neutralized the bearish setup on the intraday charts seen last week.The gains could be extended further to $11,000, as the hourly chart is reporting a bullish continuation pattern.

  • The weekly chart continues to call a deeper pullback to $9,000 with key moving averages (MAs) producing a first bearish crossover since February.A weekly close above $12,000 is needed for a complete bullish revival.

Bitcoin (BTC) has gained $1,000 since the Bakkt exchange announced it has the green light to offer bitcoin futures, but key resistance still lies ahead.


But what the hype is about?

One year ago, Bakkt announced ambitious vision to bring institutional infrastructure to digital assets with an end-to-end regulated marketplace. That vision will be realised on September 23 when Bakkt launches custody and physically-delivered daily and monthly bitcoin futures contracts in partnership with ICE Futures U.S. and ICE Clear US.


Bakkt contracts have already received the green light from the CFTC through the self-certification process and user acceptance testing has begun. With approval by the New York State Department of Financial Services to create Bakkt Trust Company, a qualified custodian, the Bakkt Warehouse will custody bitcoin for physically delivered futures. This offers customers unprecedented regulatory clarity and security alongside a regulated, globally accessible exchange in a market underserved by institutional-grade infrastructure.


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. And by now, digital asset markets are global and well-developed, but they have largely been designed to serve retail customers rather than institutional participants. Bakkt is bridging that gap to access this market and solve for factors that have slowed institutional participation. Whether concerns relate to a lack of liquidity, market quality and regulation, or issues with reliability, fees, and operational risks, they are trying to address these challenges with a transparent offering.


Bakkt is starting with the introduction of a regulated and secure qualified custodian for bitcoin to support futures contracts. The 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. In addition, the independent governance and compliance requirements of a qualified custodian mean that the Bakkt Warehouse is designed to meet the highest standards of oversight.


Uniquely, Bakkt bitcoin futures contracts will not rely upon unregulated spot markets for settlement prices, thus serving as a transparent price discovery mechanism for the benchmark price for bitcoin. The importance of this differentiator is only amplified by reports of significant manipulative spot market activity, and other concerns such as inconsistent anti-money-laundering policies and weak compliance controls.


Bakkt’s bitcoin futures will be exchange-traded on ICE Futures U.S. and cleared on ICE Clear US, which are federally regulated by the CFTC. Regulated exchanges differ from trading platforms, such as crypto spot markets in many respects, including risk management, compliance and market surveillance.


The Bakkt futures contracts will also be covered by the existing guaranty fund at ICE Clear US, which has an established risk waterfall across multiple commodities markets. An incremental $35 million is being contributed to the existing guaranty fund with the addition of these new futures contracts. Importantly, we’ve designed the Bakkt Warehouse to provide regulated, secure custody of bitcoin that is protected by $125 million in insurance.


Looking back to Milton Friedman’s prescient remarks in 1999, just as the internet was taking hold, his clarity about the future of an internet-connected economy was striking:

“The one thing that’s missing, but that will soon be developed, is a reliable e-cash. A method where buying on the Internet you can transfer funds from A to B, without A knowing B or B knowing A.”

It was a provocative, perhaps largely unnoticed remark at the time, but was followed a decade later by the watershed Bitcoin white paper and blockchain. Today, Bakkt is helping institutions, consumers, policy makers and regulators engage in this emerging market through a trusted, secure and compliant platform, as they call themselves.


Until the launch on September 23, Bakkt willll continue onboarding and testing with market participants. If you’re interested in trading the Bakkt Bitcoin Daily or Monthly Futures contracts, contact company at sales@bakkt.com.


Source: Bakkt

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