On November 20, ICE, the mother or father firm of the New York Stock Exchange, announced the delay of the Bakkt Bitcoin futures market launch from December 12 to January 24, 2019.
The assertion says Bakkt wants extra time to deal with the onboarding of shoppers and clearing members earlier than opening the futures market.
“ICE Futures U.S., Inc. will list the new Bakkt Bitcoin (USD) Daily Futures Contract for trading on trade date Thursday, January 24, 2019, subject to regulatory approval,” the announcement learn. “The new listing timeframe will provide additional time for customer and clearing member onboarding prior to the start of trading and warehousing of the new contract.”
On Tuesday, the firm launched an replace on their Twitter account explaining why Bitcoin will initially be their main focus. It says that Bitcoin’s liquidity and classification as a commodity by the U.S. Commodities and Futures Trading Commission (CFTC) are the main driving elements behind their resolution.
As the world’s most liquid and extensively distributed cryptocurrency, and the place we’ve seen the most buyer demand, bitcoin’s profile creates a liquid product on which to construct a futures contract (2/2)
— Bakkt (@Bakkt) 21 November 2018
“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,” the submit says.
In a separate blog post, Kelly Loeffler, Bakkt CEO, defined that Bakkt might be delaying their launch, citing their dedication to releasing a platform that’s totally practical on day one as the reasoning behind this resolution.
“Given the volume of interest in Bakkt and work required to get all of the pieces in place, we will now be targeting January 24, 2019 for our launch to ensure that our participants are ready to trade on Day 1,” she wrote.
Loeffler additionally famous important progress in discussions with regulatory authorities in the U.S. and that Bakkt has been working exhausting to onboard as many purchasers as doable.
Bakkt’s CEO additionally provided a number of solutions to persisting questions in the FAQ part of the Medium submit, together with the reasoning behind their resolution to focus solely on Bitcoin, and clarification as to how the worth of Bitcoin might 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,” Kelly Loeffler concluded.
As a part of its efforts to develop the product, Bakkt beforehand introduced it was working with BCG, Microsoft and Starbucks. The firms offered help in each buyer expertise and threat administration for the product.
Bakkt anticipated launching its futures buying and selling on December. 12. The new date remains to be topic to regulatory approval, indicating that the platform could not have acquired such approval but.
As reported by CCN, following the launch of the announcement, rumors emerged that the Bakkt delay induced the worth of Bitcoin to drop and the info was leaked to a handful of large-scale traders in the cryptocurrency market.
Some argued, provided that Bakkt acknowledged rising demand for its futures product, that traders purchased into BTC as it dropped to the low area of $4,000 on Monday and it was all a plan to build up extra of the dominant cryptocurrency.
However, there exists no proof to help the principle and the significance of the launch of the Bakkt futures market nonetheless stays in query. The affect of the Bitcoin futures market operated by Bakkt on the cryptocurrency sector is an uncertainty and the magnitude of the demand for Bakkt from traders in the US market, who’re the goal shopper base of the establishment is unclear.
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