Positive news ahead in 2019 as Bakkt, the first futures that will settle in bitcoin is expected to get approval soon from regulators. The Intercontinental Exchange project is aimed at institutional investors who are unsure of the new cryptocurrency asset class.
Notable Bitcoin developer Adam Back tweeted that he was looking forward to Bakkt one day physical Bitcoin future.
looking forward to @bakkt one day physical delivered #Bitcoin future, traded on ICE’s electronic trading platform, and physically delivered to Bakkt Warehouse for custody. https://t.co/lvNHgKrorc
— Adam Back (@adam3us) December 20, 2018
The futures launched by New York Stock Exchange owner Intercontinental Exchange is targeting institutional players who have avoided cryptocurrency because of worries that they are unregulated and prone to market manipulation.
The chief executive of the ICE, Kelly Loeffler, said in a statement:
“Once digital assets have more trust and regulation, people will be more comfortable using digital assets as currency. It’s great to have cash-settled, but there’s a need for physical delivery”.
Regulators at the Commodity Futures Trading Commission have been working with ICE to make sure its business plan complies with CFTC regulations. The project will require an exemption from the agency to allow it to hold on to customers’ bitcoins, since CFTC statutes are written to account for cash, securities, and agricultural commodities such as wheat or coffee.
CFTC commissioners will likely vote on whether to approve the project early in 2019, after which the public will have 30 days to have their say.
Bitcoin futures launched in December 2017, paid in dollars when the contract expires, while Bakkt futures will pay in bitcoin. The benefit for bitcoin is that this will create demand pushing prices higher, unlike dollar settled futures which only pay in cash and many believe may have been responsible for the downward trend in Bitcoin through 2018.
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