A new Bitcoin futures product – which will settle in Bitcoin instead of cash – is reportedly about to get the green light.
According to Wall Street Journal, Bakkt’s Bitcoin futures are “expected to soon get regulatory approval” from the Commodity Futures Trading Commission (CFTC).
What sets Bakkt apart from other bitcoin derivatives is that it pays out entirely in cryptocurrency, instead of settling in cash. The WSJ report noted that while the application is still under the CFTC review, it will definitely be launched in 2019.
Currently, Bakkt’s peers include contracts issued by CME and CBOE, but Bakkt is distinguished by being entirely crypto-based, rather than a contract which settles in USD payouts based on the performance of cryptocurrency prices.
The new Bakkt’s Bitcoin (USD) Daily Futures Contract will be listed on ICE Futures U.S. Inc. for trading on the 24th of January after it gains regulatory approval. The time frame for the new listing will provide clearing members onboarding and customer with more time before the start of warehousing and trading of the new contract.
Speaking on the possibilities, Kelly Loeffler, chief executive of the New York Stock Exchange owner Intercontinental Exchange (ICE) cryptocurrency business, which has been instrumental in backing the contract said, “Once digital assets have more trust and regulation, people will be more comfortable using digital assets as currency.” She added, “It’s great to have cash-settled, but there’s a need for physical delivery of bitcoin.”