The cryptocurrency custodian and crypto derivatives exchange subsidiary that is operated by Intercontinental Exchange (ICE), Bakkt, has gone live. ICE is the operator of the New York Stock Exchange (NYSE). Bakkt launched in its highly-anticipated physically-delivered Bitcoin futures at 00:00 UTC on Monday (23 September 2019).
The first Bakkt Bitcoin futures trade was transacted and executed just two minutes after the launch. The launch was announced by Bakkt in its 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) Monthly Futures Contract and Bitcoin (USD) Daily Futures Contract are now readily available for trading on ICE Futures U.S. All these features and products are already cleared by ICE Clear U.S. The final settlement is carried out through ‘physical delivery’ in the Bakkt Warehouse that opened for customers’ Bitcoin withdrawals/deposits on September 6, 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
According to official announcements, the delivery date for the daily Bitcoin futures is the “second Exchange Business Day after the Contract Date”. For the monthly Bitcoin futures, it comes as the “third Friday of the contract month”.
By 04:43 on September 23 which was less than five hours after the launch of trading, up to 13 monthly (OCT19) futures contracts had been traded. The last one was traded at $10,067.50. Notably, no daily futures contracts had been transacted.
The Bakkt Warehouse
On September 6, the Bakkt Warehouse got launched and Bloomberg published an article saying:
- Intercontinental Exchange hopes the futures will form price discovery for BTC besides any cash market influence. In that context, the company had cited abuse and manipulation in spot Bitcoin trading.
- Both of these futures contracts will be margined which means that there will be no need for the users to pre-fund their trading accounts or even collateralize them entirely as was the case which was previously imagined by ICE.
- It is not common in the futures world for a company to operate as an exchange, settlement authority, and a clearinghouse. The settlement authority part delayed ICE’s plans for months since it required the NYDFS approval to become a trust.
As it is evident from a 24-hour price chart by CryptoCompare, Bakkt’s Bitcoin futures launch did not offer any support for the BTC price above $10,000.
The reason for Bitcoin’s price drop could be due to the disappointment of the market since the early trading volume has been quite small.