The declining crypto markets woke up to good news on Friday after Intercontinental Exchange-backed startup Bakkt revealed that it has finally obtained permission from the New York State Department of Financial Services (NYDFS) to launch its physically settled Bitcoin Futures product.
In a blog post by Bakkt today, the Wall Street-backed crypto-asset venture confirmed that it would officially launch its highly-anticipated physically-settled Bitcoin Futures contract on September 23.
“We are excited about supporting the future of digital assets at Bakkt. Until our launch on September 23, we’ll continue onboarding and testing with market participants,” Bakkt CEO Kelly Loeffler said, apparently with reference to the fact that Bakkt began user acceptance in July.
To be clear, today’s approval from the NYDFS allows Bakkt to create a Trust Company that will custody Bitcoin for the products of the physically delivered futures contracts planned by the startup.
Bakkt will thus, not require a third-party custodian for its platform, reinforcing its mission to offer customers unprecedented regulatory clarity and security alongside a regulated, globally accessible exchange in a market underserved by institutional-grade infrastructure.
Bakkt plans to offer two types of contracts on its platform: the daily and monthly Bitcoin Futures contract. The daily Bitcoin futures contract will make provision for traders to transact in a same-day market, while the monthly futures contract will allow users the means to trade monthly.
As mentioned earlier, today’s approval brings to climax Bakkt’s wait for regulatory approval to commence operation of its so-called Bakkt Warehouse which will be pivotal to their success as a crypto derivatives firm. According to Bakkt, its warehouse is equipped with physical and cybersecurity protections that most reputable exchanges possess, including the New York Stock Exchange (NYSE).
Additionally, Bakkt hopes to be transparent with its futures contract prices and does not have the intention of relying on unregulated exchanges to determine the price of Bitcoin.
Bitcoin Records Fresh 4% Gains
While it would be wrong to totally credit Bakkt’s approval as the reason for Bitcoin’s 4% gain in the last 24 hours, there is no doubt that the development must have played a part in the price recovery.
The company’s launch of its platform targeting institutional investors is expected to provide a home for a reasonable number of Wall Street firms who likely stayed out of the crypto market because of the lack of a well-regulated trading venue.
Bakkt’s ties with the Intercontinental Exchanges put it in fine stead to fill that gap and eventually increase institutional involvement in the crypto market.
Also, coming off the back of recent comments by Coinbase CEO, Brian Armstrong that institutions are already investing $200-$400M weekly in crypto makes it even more bullish for the leading cryptocurrency to record new gains.
At press time, Bitcoin was trading at nearly $10,500 with a market cap just above $187.6 billion. The cryptocurrency’s also owned 69.2% of the crypto market share as altcoins continues to decline.
