The Intercontinental Exchange (ICE), the notable owner of the New York Stock Exchange (NYSE), announced they will list the “Bakkt Bitcoin (USD) Daily Futures Contract” for trading on December 12, 2018. ICE is one of many notable names who collaborated to create Bakkt, which physically settles bitcoin futures contracts. This delivery of bitcoin challenges a previous point of contention for bitcoin Exchange Traded Fund (ETF) applications in the past when the SEC cited a lack of liquidity as one of their main reasons for denying them.
Described as “A physically settled daily futures contract for bitcoin held in ICE’s Digital Asset Warehouse,” contract sizes of one bitcoin will soon be available to investors for trading. These contracts, which offer one-day delivery for clients, will provide a new level of liquidity for the cryptos market; a past point of criticism from the SEC.
The Bakkt platform, which is backed by the Intercontinental Exchange, is a global platform that “…will connect investors, merchants and consumers, making it easier, faster and more cost-efficient to access, trade and use digital assets.” Concerning the bitcoin futures contracts, Bakkt enables access “for institutional investors via regulated market infrastructure.” Additional backers of the platform are Microsoft, Starbucks, and Galaxy Digital.
As many are hopeful for a bitcoin surge going into the next year, the trading of the Bakkt bitcoin contract on the Intercontinental Exchange can certainly help to achieve this. Those traditional investors now have a legal access point to digital asset trading within the confines of where they trade. The market as a whole should benefit from this new level of access and liquidity.