In an October 22nd notice, NYSE owner-operators ICE announced their Bakkt Bitcoin (USD) Daily Futures Contract would start being settled on December 12th, 2018. The contracts will go live a little over one year after bitcoin futures were first authorized in the U.S. financial scene.
In U.S., Bitcoin Futures Market Matures Yet
Intercontinental Exchange Inc. (ICE), the owner-operators of the New York Stock Exchange, have declared their forthcoming proprietary bitcoin futures contract will be launching on December 12th, 2018.
The instrument, formally dubbed the Bakkt Bitcoin (USD) Daily Futures Contract, will be physically settled through holdings at the Digital Asset Warehouse arm of ICE’s Bakkt, the cryptocurrency platform the Wall Street powerhouse first announced back in August.
The contract’s listing exchange will be ICE Futures U.S. and its clearing venue ICE Clear U.S.
“Each futures contract calls for delivery of one bitcoin held in the Bakkt Digital Asset Warehouse, and will trade in U.S. dollar terms,” the announcement read. “One daily contract will be listed for trading each Exchange Business Day.”
The launch of the instrument will come just over one year after bitcoin futures actualized in America. The U.S. Commodities Futures Trading Commission (CFTC) first gave the greenlight to such instruments on December 1st, 2017, being the inaugural regulatory body in the world to do so.
Thus ICE will soon join the ranks of notable futures players like CME Group and the Chicago Board Option Exchange (CBOE), who have already respectively been running their own bitcoin futures products since last December. Other big firms, like Nasdaq and TD Ameritrade, have done their homework on similar contracts.
ICE owns several major stock exchanges and clearing houses across the globe. In 2017, the firm generated revenues upward of $5.8 billion USD. Now, through Bakkt and its services, the global markets maestro has added a cryptocurrency platform to its stable as well.
What Could Come Next?
A talking point that quickly gained traction in the wake of ICE’s announcement was that further expansion in the bitcoin futures market would bode well for the Security and Exchange Commission (SEC) lightening up on bitcoin exchange-traded funds, or ETFs.
Such ETFs would trade similarly to how stocks do and would trade near the actual bitcoin price.
The SEC has denied a spate of bitcoin ETF applications this year, citing concerns over the small size of the related market, among other factors.
For his part, Galaxy Digital crypto bank founder Michael Novogratz posited earlier on Twitter that Bakkt’s futures product would, indeed, help to further assuage some of the SEC’s proposed concerns.
— Michael Novogratz (@novogratz) October 22, 2018
What an exact timeline would look like regarding such assuagement remains to be seen. But either way, ICE’s dive into the arena of bitcoin futures is the latest in a series of major institutional developments in the cryptoeconomy in 2018.
Less than two weeks ago, multinational financial services titan Fidelity, which manages trillions of dollars of assets annually, announced Fidelity Digital Assets, a “full-service” cryptocurrency platform for institutions.
ErisX also made headlines this month. The platform, backed by CBOE, TD Ameritrade, and others, will offer spot and futures contracts based on cryptocurrencies.
Accordingly, the specter of bitcoin continues to grow in Wall Street’s eyes.
What’s your take? Can ICE’s bitcoin futures be a gamechanger? Or is this not as big a deal as some would think? Let us know in the comments section below.
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