Bakkt, the crypto custodian and crypto derivatives exchange subsidiary of Intercontinental Exchange (ICE), the operator of the New York Stock Exchange (NYSE), launched trading in its highly-anticipated physically-delivered Bitcoin futures at 00:00 UTC on Monday (23 September 2019).
The first Bakkt Bitcoin futures trade was executed just two minutes after the launch, which Bakkt announced with this historic tweet:
The first Bakkt Bitcoin Futures trade was executed at 8:02pm ET at a price of $10,115
— Bakkt (@Bakkt) September 23, 2019
Bakkt’s Bitcoin (USD) Daily Futures Contract and Bitcoin (USD) Monthly Futures Contract are now available for trading on ICE Futures U.S., and they are cleared by ICE Clear U.S.
Final settlement is carried out via “physical delivery” in the Bakkt Warehouse, which opened for customers’ Bitcoin deposits/withdrawals on 6 September 2019:
Today our Warehouse opens for customer bitcoin deposits and withdrawals as we prepare for the Bakkt Bitcoin Daily & Monthly Futures, launching September 23
The availability of physical delivery brings more flexibility in managing bitcoin exposure
— Bakkt (@Bakkt) September 6, 2019
The delivery date for the daily Bitcoin futures is the “second Exchange Business Day after the Contract Date” and for monthly Bitcoin futures, it is “third Friday of the contract month”.
As of 04:43 on September 23 (i.e. a little less than five hours after the start of trading), 13 monthly (OCT19) futures contracts had been traded (the last one at a price of $10,067.50), i.e. just 13 bitcoins (since the contract size is one BTC), but no daily futures contracts had been bought/sold.
Today’s announcement means that Bakkt has beaten two other CFTC-regulated Bitcoin futures exchanges in the race to launch regulated physically-delivered Bitcoin futures: LedgerX and ErisX.
On 6 September 2019, the day that the Bakkt Warehouse was launched, Bloomberg published an article that said:
- “Both futures contracts will be margined, meaning there’s no need for users to pre-fund their trading accounts or collateralize them at 100% as was previously envisioned by ICE.”
- “ICE hopes the futures will create price discovery for Bitcoin apart from any cash market influence, as the company has cited abuse and manipulation in spot Bitcoin trading.”
- “It’s rare in the futures world for a company to act as exchange, clearinghouse and settlement authority; this last part delayed ICE’s plans for months as it sought the NYDFS approval to become a trust.”
As you can see in the following 24-hour price chart by CryptoCompare, today’s launch of Bakkt’s Bitcoin futures has not managed to stop the Bitcoin price from dropping below $10,000, and perhaps this is due to the disappointment of the market due due to the fact that the early trading volume has been quite small:
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