Bakkt CEO: Why Launch of Our Bitcoin Futures Contract Has Been Postponed to 24 January 2019

Siamak Masnavi

On Tuesday (20 November 2018), Kelly Loeffler, the Chief Executive Officer of Bakkt, a subsidiary of the Intercontinental Exchange (ICE), announced that the launch date for the Bakkt platform, which offers a physically-settled Bitcoin (USD) Daily Futures Contract, has been changed from 12 December 2018 to 24 January 2019, and explained the reasons for this delay.

Loeffler started by noting that her team has been "hard at work with customer onboarding and securing regulatory approvals." With regard to the latter, she said that they are continuing "to work closely with the CFTC as they conduct their thorough review of the Bakkt™ Bitcoin Daily Futures contract and the Bakkt Warehouse." Furthermore, she points out that these products "represent a critical shift in the evolution of crypto markets toward more accessible, useful, and regulated instruments."

Next, the Bakkt CEO stated that due to "the volume of interest in Bakkt and work required to get all of the pieces in place," the new launch date will be 24 January 2019 to ensure that everything is ready on launch day:

"As is often true with product launches, there are new processes, risks and mitigants to test and re-test, and in the case of crypto, a new asset class to which these resources are being applied. So it makes sense to adjust our timeline as we work with the industry toward launch."

Then, she explained that they were planning to expand their offering (details of which would be announced "in the coming weeks"), but she was able to announce that they have managed to get "insurance for bitcoin in cold storage," and that they are "in the process of securing insurance for the warm wallet within the Bakkt Warehouse architecture." 

Loeffler also took this opportunity to answer a few frequently asked questions about their platform.

For example, on the question of why they were starting with Bitcoin and when other cryptocurrencies would be supported, she gave this answer:

"Bitcoin today accounts for over half of total crypto market capitalization and has been deemed to be a commodity, and its derivatives are regulated in the US by the CFTC. As the world’s most liquid and widely distributed cryptocurrency, and where we’ve seen the most customer demand, bitcoin’s profile creates a liquid product on which to build a futures contract. We’ll consider additional contracts as the landscape evolves and as we receive additional customer feedback about what they want and need."

Another interesting question that she answered was how the price of Bitcoin was going to be established:

"Given the transparency and regulation of the futures markets, the futures price in a one-day physically settled bitcoin contract will serve as a price discovery contract for the market. There is no reliance on cash platforms for settlement prices for pricing the daily bitcoin futures contract."

 

Featured Image Courtesy of Bakkt

Bitcoin’s Price Fails to Surpass $8,000 as Crypto Market Loses $12 Billion

The cryptocurrency space has recently lost about $12 billion in only 24 hours, at a time in which the flagship cryptocurrency bitcoin failed to remain above the $8,000 mark. The cryptocurrency has more than doubled in value so far this year, but is seemingly struggling to keep rising.

According to CryptoCompare data, one bitcoin is currently trading at $7,600 after falling 3.6% in the last 24-hour period. The cryptocurrency started seeing its price drop shortly after hitting $8,000, and has recovered from a $7,500 low in intraday trading.

Bitcoin's price performance in the last 24-hour period

The cryptocurrency’s price performance so far this year has seen interest in it grow, so much so that it hit a 14-month high in Google search interest this month.  Cameron Winklevoss, a co-founder of the popular Gemini cryptocurrency exchange, recently stated that investing in bitcoin is “not as crazy as sitting on the sidelines when the future of money is literally being built before your eyes.”

Despite the recent price drop, some analysts have revealed they’re bullish as BTC’s mining rewards halving event occurs next year. This, according to some, helps remind users of the cryptocurrency’s scarcity, as block rewards are cut in half.

The recent price drop could potentially be a delayed reaction to Tether, the company behind the popular USDT token, revealing it has invested some of its reserves in BTC and “other assets.” While some claim the firm bought extremely small amounts of crypto with its reserves, New York Supreme Court Judge Joel M. Cohen questioned the paradox, stating:

Tether sounded to me like sort of the calm in the storm of cryptocurrency trading. And so if Tether is backed by bitcoin, how is that consistent? If some of your assets are in a volatile currency that Tether is supposed to somehow modulate, that seems like it’s playing into what they are saying.

Bitcoin’s drop saw most top altcoins follow suit, with some dropping as much as 7% in the last 24-hour period. Litecoin, Bitcoin Cash and Zcash are among the least affected tokens, being down between 4% and 5.2%.

Ethereum’s ether, XRP, and XMR are all down by about 6% in said period, while other cryptocurrencies like Dash, Cardano, and QTUM dropped by as much as 10%. Bitcoin SV, which recently surged by 80% after Craig Wright filed a copyright registration for the Bitcoin whitepaper, is down by little over 1%.