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Bakkt Launches The First CFTC-Regulated Option on Bitcoin And Cash-Settled Futures



Bakkt, the Bitcoin Futures trading platform of the Intercontinental Exchange (ICE), has just announced that it’s rolling out cash-settled Bitcoin futures and monthly options. The platform sees an increasing volume over the past week, signaling further institutional involvement.

Bakkt’s Cash-Settled Futures Contract

According to an official publication by Adam White, COO at Bakkt, the platform has rolled out a cash-settled Bitcoin futures contract.

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So far, Bakkt was only offering physically-delivered Bitcoin futures. The difference is that when trading with the latter, the users receive an actual bitcoin at the end of the expiry period and not its cash equivalent, which is the case with cash-settled contracts.

The new contract will be available on ICE Futures Singapore. This is an approved exchange which allows Asian and international traders to gain exposure to Bitcoin’s price, without owning the underlying asset.

It’s also worth noting that this specific contract leverages the settlement price of the benchmark product of Bakkt – it’s physically-delivered Bitcoin futures contract.

Bakkt’s Regulated Monthly Bitcoin Options

The other product that the platform now supports represent monthly Bitcoin options. Interestingly enough, this is the first option on a futures contract for bitcoin that is regulated by the Commodity and Futures Trading Commission (CFTC) in the US.

The option settles two days before the expiry on ICE Futures U.S. Additionally, the price discovery happens within a federally regulated market, and it doesn’t have exposure to bitcoin’s yet unregulated spot market.

This move should, in theory, increase the overall turnover that Bakkt sees. As CryptoPotato reported earlier, Bakkt’s volume is continuously rising, and it appears to continue doing so. The platform’s products are oriented towards institutional investors, and that’s why it could be a signal that their interest in the field is growing stronger.

Of course, it’s also important to note that Bakkt will have serious competition when it comes to cash-settled Bitcoin futures because CME Group’s products are generating volumes much higher than that of Bakkt, as of yet.



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