It has now been a full day of trading for Intercontinental Exchange’s (ICE) Bakkt platform, and it can put down on record that the opening flurry saw 71 Bitcoin being traded on this institutional-focused platform.
Bakkt’s physical Bitcoin futures contracts were being heralded as a real game-changer for the adoption of cryptocurrency and the introduction of further institutional money into the market. However, the launch was accompanied by a dip in the Bitcoin market that saw the price drop below $10,000.
Still, it is not all bad as the 71 BTC opening day trading volume is a decent first effort for the platform that is not immediately friendly too cautious institutional investors. This futures contract operates with Bitcoin and requires the users to hold the tokens, unlike the pioneering offerings from CME and CBOE.
The Bakkt offering is incredibly well regulated – as that is what was holding back the launch of the platform for almost a year – and it is an attractive offering for investors who are starting to take a shying to Bitcoin futures.
Part of this stringent regulation has seen ICE determine the tentative margin requirements for the contracts. The initial hedge requirement for daily and monthly futures contracts is $3,900, while the initial speculative requirement for both contracts is $4,290.
The inter-month add-ons for the monthly and daily futures contracts are between $400 and $1,000 for the hedge rate and between $440 and $1,100 for the speculative rate.
Bitcoin futures have become more and more popular with CME reporting that it will soon be offering options on its contracts in 2020 and that it wants to double its positions for users. With this increased uptake in Bitcoin futures trading and the perception that Bakkt could be an excellent bridge between the institutional and crypto world, the 71 BTC traded is a cautiously optimistic benchmark.
The whole intention for Bakkt coming into existence has been to create this integrated platform that enables consumers, merchants and institutional clients to buy, sell, store and spend digital assets on a “seamless global network.”
By having such an offering, the hope is that Bakkt will be able to push for the adoption of digital assets across more than just the already established cryptocurrency ecosystem. The belief is that traditional investors have their eye on the Bitcoin and cryptocurrency market, but do not have the right tools to tackle it as they would like.
This has led the likes of Tom Lee and John McAfee to proclaim that Bakkt could well become that all-important tool.
Lee said: “I am very positive on Bakkt and its ability to improve trust with institutions to crypto,” while McAfee echoed his sentiments:
“BAKKT goes live tomorrow. It is an institutionalized exchange so I won’t be using it, but institutions will feel a level of trust that they had not had. It could jump-start Crypto adoption. But remember – it is the opposite of freedom’s movement.”