Bakkt's ambitions highlight the ultimate goal: individual investors
At the end of 22:00 UTC on Monday, the New York Stock Exchange parent company Intercontinental Exchange's bitcoin futures trading platform only sold 2 daily bitcoin futures contracts and 71 monthly bitcoin futures contracts, and Until the 18 hours after the release, the first daily Bitcoin futures contract did not even have any transactions.
Still, Baakt's chief operating officer, Adam White, is still optimistic about the future of its trading platform. In an interview with CNN reporter Julia Chatterly, Adam White said that the true meaning of the Intercontinental Exchange's physical delivery bitcoin futures contract is actually "the first time in history that people have end-to-end The regulated bitcoin price is found in the market."
Indeed, Adam White hopes that daily futures contracts will lead to bitcoin price discovery, although most of the attention on the market now focuses on Bakkt helping institutional funds enter the cryptocurrency market, but in fact this time launching physical bitcoin Futures contracts have not closed the door for retail investors. Adam White said:
“Bakkt is indeed designed for institutional investors, but at the same time the product is also a futures contract. That is, we predict that this product will also be traded through retail brokers in the future, which means that retail investors may also trade Bakkt’s real thing. Delivery of bitcoin futures contracts."
Not only that, but Adam White also pointed out that the Intercontinental Exchange has been working on the Bakkt futures contract for more than two years, so they are not eager to achieve a large increase in business volume in the short term, because demand is always slowly increasing and cannot be achieved overnight.
Heath Tarbert, chairman of the recently appointed US Commodity Futures Trading Commission (CFTC), also pointed out that while demand for cryptographic derivatives is increasing, the demand for cryptographic derivatives is comparable to other commodity categories. Still relatively low.
How does Bakkt affect the halving of Bitcoin block incentives?
Bakkt first disclosed in January this year a bitcoin futures contract that would provide monthly physical delivery, when they also announced that they had obtained approval from the US Commodity Futures Trading Commission for self-certification. According to Adam White, Bakkt's monthly contract will be extended by 12 months, which means that traders can predict the bitcoin price within a year.
Adam White further explained:
“This is not only important for speculators, it is equally important for many businesses that rely on bitcoin prices – miners are entities that exploit bitcoin – they want to hedge risk, so we believe that bitcoin futures contracts for physical delivery are best for miners. ”
Not only that, Adam White also believes that daily and monthly physical delivery of bitcoin futures will help predict the price movements of Bitcoin block rewards in the months before the next halving. Currently, the Bitcoin block is generated around every ten minutes, and the miners are BTC incentives, but Bitcoin will halve the number of incentives in about four years. Adam White added:
“If the demand for most physical delivery bitcoin futures contracts remains the same, you will see prices increase as the block incentive supply decreases. We believe this is an important part of futures contracts and can pass such events. Help companies discover the fair market value of Bitcoin."
The next halving of Bitcoin block incentives is expected to be around May 2020.
It is reported that Bakkt's monthly and daily physical settlement bitcoin futures contract settlement price is below 9,900 US dollars, much higher than the spot market price.
- Bakkt's ambitions