Intercontinental Exchange [ICE], the owner of the the New York stock market [NYSE], can list its highly-anticipated bitcoin futures contract in just less than 2 months, i.e.. on 12th Dec.
Familiar as a physically-settled daily futures, the contracts are backed by actual bitcoins held within ICE’s Digital Asset Warehouse. In line with a press release, every future contracts would be validated through ICE Clear U.S., the firm’s clearing venue.
Adding further, the press release stated:
“Each future contract needs delivery of 1 bitcoin held within the Bakkt Digital Asset Warehouse and would trade USD and others. One daily contract would be listed for trading each Exchange Business Day.”
Launched in partnership between ICE — the operator of twenty three leading international stock market, together with the New York Stock Exchange [NYSE] — and other household names together with Starbucks and Microsoft, the Bakkt venture aims to make an open, compliant ecosystem for digital assets.
Bakkt was created to be a “regulated ecosystem” that gives protection for institutional investors who need to induce exposure to cryptocurrency. At the time of the announcement in Sept, Bakkt had same the physical bitcoin futures would be listed against the USD, pound sterling, and euro.
“A important element to price discovery is physical delivery. Specifically, with our answer, the commerce of bitcoin is absolutely collateralized or pre-funded. As such, our new daily bitcoin contract won’t be traded on margin, use leverage, or serve to make a paper claim on a true asset,” Bakkt aforementioned at the time, responding to criticisms that the contracts might mask “hidden leverage.”
For every one purchase of a USD/BTC pair futures, there’ll be a delivery of 1 bitcoin into the owner’s account at settlement. That contrasts with the bitcoin futures markets on CBOE and CME, that are cash-settled, which means that no actual cryptocurrency assets exchange hands at expiration.
Investors in Bakkt’s platform embody Mike Novogratz‘s Galaxy Digital, Pantera Capital, and several others.