{"id":55983,"date":"2019-08-30T18:13:50","date_gmt":"2019-08-30T16:13:50","guid":{"rendered":"https:\/\/en.ethereumworldnews.com\/?p=55983"},"modified":"2022-03-11T14:19:08","modified_gmt":"2022-03-11T11:19:08","slug":"bakkt-bitcoin-futures-is-a-big-positive-say-crypto-insiders-step-towards-etfs","status":"publish","type":"post","link":"https:\/\/en.ethereumworldnews.com\/bakkt-bitcoin-futures-is-a-big-positive-say-crypto-insiders-step-towards-etfs\/","title":{"rendered":"Bakkt Bitcoin Futures A Big Positive Say Crypto Insiders, Step Towards ETFs"},"content":{"rendered":"\n

Gary McFarlane, the cryptocurrency analyst at interactive investor, shares his thoughts \u2013 and those of other industry figures and experts \u2013 on Bakkt bitcoin futures<\/em>.<\/p>\n\n\n\n

On 23 September Bakkt finally launches<\/a> its physically settled bitcoin futures product \u2013 institutional customers can start depositing bitcoin from 6 September<\/a>. <\/p>\n\n\n\n

But onboarding institutions into crypto is just the first part of the plan from the Intercontinental Exchange (ICE)-backed platform. <\/p>\n\n\n\n

Just as important to the project\u2019s ultimate success could also be\nthe push into crypto payments, as seen in its partnership with Starbucks and in\nblockchain technology with Microsoft bringing its talent pool to the table.<\/p>\n\n\n\n

Although the much-delayed launch is welcome news, some of the\nupside may already have been priced in. But until the futures products \u2013 a\ndaily and monthly contract \u2013 start trading and we can see the volumes, it is\nhard to predict its impact on the bitcoin price.<\/p>\n\n\n\n

At the centre of the offering is the custody service, Bakkt Warehouse\nwhich is fully regulated and where the bitcoin it holds is protected by an $125\nmillion insurance guaranty.  <\/p>\n\n\n\n

That, and the reliance on regulated exchanges for spot prices (as\nthe CME cash-settled bitcoin futures do), contributes greatly to the maturation\nof the crypto space, and the reliability of price discovery in particular. <\/p>\n\n\n\n

Going by the balance of comments from industry figures canvassed below,\nBakkt futures will be a boon for cryptoassets. <\/p>\n\n\n\n

Cash-settled, but will it move the bitcoin price?<\/h2>\n\n\n\n

However, a minority believes there will be little or no impact\nfrom their introduction. <\/p>\n\n\n\n

Most believe the physical settlement element could be a key price\ndriver although that depends on volumes and the extent to which futures are\nheld to expiry. <\/p>\n\n\n\n

Typically, though, most contracts are closed before expiry.\nAssuming the same behaviour is apparent in the bitcoin market, then the need to\nbuy physical bitcoin to settle will not necessarily be sufficient to see\nnoticeable demand pressuring the spot price higher.<\/p>\n\n\n\n

It could be that the biggest impact will be felt more indirectly,\nby lending greater credibility to the space and through improving accessibility\nfor institutions.<\/p>\n\n\n\n

Good news for Ethereum?<\/h2>\n\n\n\n

It could also lead to other cryptoassets getting the futures\ntreatment, with Ethereum the top candidate. The tie-up with Microsoft could be\na clue to Bakkt developments in smart contract engineering as it seeks to\nbecome a leader in decentralised finance (DeFi). <\/p>\n\n\n\n

The dominant platform by a mile in DeFi is Ethereum, despite the\nnetwork being \u201calmost full\u201d as the Tether stablecoin begins to swamp capacity,\nwith utilisation running at circa 90%.<\/p>\n\n\n\n

Big step forward for bitcoin and bitcoin ETFs<\/h2>\n\n\n\n

Bakkt chief executive Kelly Loeffler says that a central aim of Bakkt\nis to provide a \u201ctrusted ecosystem\u201d with \u201ccomprehensive market oversight\u201d. If\nit only partly succeeds in achieving those aims it will still be a big step\nforward for bitcoin. <\/p>\n\n\n\n

Bakkt\u2019s traction will also go some way to determining if\/when a\nbitcoin exchange traded fund (ETF) is approved in the US. Price discovery and\ncustody were at least two of the factors that the US Securities and Exchange Commission\n(SEC) cited as holding back approval. <\/p>\n\n\n\n

Bakkt bitcoin futures help to improve prospects for crypto ETFs on\nboth (price discovery  and custody) those\ncounts. That could be the most important way in which Bakkt bitcoin futures influence\nthe spot price, at both regulated and unregulated exchanges.<\/p>\n\n\n\n

Don\u2019t be surprised if there is another price pump as the launch\ndate for trading on the ICE Futures US exchange approaches and in the days that\nfollow. <\/p>\n\n\n\n

However, more lasting price support for bitcoin will be indirect\nas the platform makes strides beyond hawking financial instruments to\nfacilitating a crypto payments ecosystem.<\/p>\n\n\n\n

\n\n\n\n

Chieh Liu, founder and chief executive of Singapore-based bitcoin derivatives exchange Overbit.com<\/a><\/h2>\n\n\n\n
\"\"
Chieh Liu, founder and chief executive Overbit<\/em><\/figcaption><\/figure><\/div>\n\n\n\n

I think retailers see Bitcoin futures as good news and tend to go\nlong on the market as a result. But the reality as we have seen before with CME\nintroducing futures last year is that institutions use it as a hedge and often\nthis results in Bitcoin going down.<\/p>\n\n\n\n

Bitcoin today is a very volatile asset and we are seeing more\ntraders getting into it as an interesting instrument to trade rather than just\na coin to hold for long term.<\/p>\n\n\n\n

There is no ramifications for Overbit, we are registered in\nSeychelles and working closely with its regulators where they are working on\nnew crypto framework.<\/p>\n\n\n\n

I have no comment regarding to the recent HK protest, however I\nexpect HK will not be as attractive as before for most companies that want to\nsettle in Asia.<\/p>\n\n\n\n

\n\n\n\n
\"\"
Lee Birkett, founder and chief executive of JustUs, Moneybrain BiPS
<\/figcaption><\/figure><\/div>\n\n\n\n

Lee Birkett, founder and chief executive of peer-to-peer retail lender in the UK JustUs<\/a> and its tokenised spin-off BiPS<\/a><\/h2>\n\n\n\n

Bakkt for me is a credibility move for the sector in that\nthe ruler will have well and truly been all over every piece of that legal structure,\nprobably more so than with any other global asset class ever. It is a big step\nforward for a new asset class like crypto.<\/p>\n\n\n\n

I still don\u2019t see bitcoin price stability improving with this move because bitcoin is still controlled by the whales.<\/p>\n\n\n\n

I turned to Crypto as we had overseas investors wishing to invest in our UK centralised Peer to Peer platform, however banks would not let the cpaital flow accross borders. Using Blockchain and our own currency unlocks this impasse and provides global liquidity for all eligible jurisdictioins.<\/p>\n\n\n\n

\n\n\n\n
\"\"
Gabrielle is CEO at Coinrule.io<\/em><\/figcaption><\/figure><\/div>\n\n\n\n

Gabriele Musella, chief executive and head of product at algorithmic trading rules platform Coinrule<\/a> <\/h2>\n\n\n\n

The hopes for broad mainstream adoption of bitcoin has been\nconnected historically to the development of the lighting network on Bitcoin\nblockchain. Bakkt, instead, could represent the core catalyst. Supported\nby global companies like Starbucks and Microsoft, the payment system that the\ncompany is developing could even reach millions of people from day 1.<\/p>\n\n\n\n

Gabriele is a\nDesign-Driven Entrepreneur. With over 15 years\u2019 experience within fintech, telco,\nscience, banking. He is a mentor at Google Launchpad, StartupBootCamp and\nVirgin Startups. <\/em><\/p>\n\n\n\n

The impact generated by the introduction of a\nphysically-settled future crypto derivative is rather unpredictable. The main\nbenefit would likely be the development of new crypto custodian companies focus\non the delivery of services for B2Bs and Institutions. That will undoubtedly be\na significant step forward for the whole ecosystem.<\/p>\n\n\n\n

Therefore, we can say that the launch of Bakkt futures is\nnot directly impacting Ethereum. Nevertheless, considering the integration\nof Ethereum on Microsoft Azure in the past months, it wouldn\u2019t be surprising to\nsee also an ETH future product being launched in the coming months.<\/p>\n\n\n\n

\n\n\n\n
\n\n\n\n
\"\"
Suren Ravindra, co-founder and chief product strategy officer Knabu<\/em><\/figcaption><\/figure><\/div>\n\n\n\n

Suren Ravindra, former derivatives trader and co-founder and chief product strategy officer at Knabu.me<\/a>, which is building a blockchain-based bank <\/h2>\n\n\n\n

Bakkt, LedgerX, ErisX, SeedCX all bring increased liquidity\nin huge bounds to the market. It is proof that the industry is evolving.<\/p>\n\n\n\n

Bakkt is interesting because it\u2019s physically settled, but\nthe size of ICE in traditional markets (eg commodities), and the pace at which\nthey grow to facilitate the trading needs of each industry is incredibly high.\nICE owns the NYSE and has years of experience in the industry for creating\nefficient high-volume trading.<\/p>\n\n\n\n

I\u2019d also say once Bakkt opens for trading it won\u2019t be an\nimmediate price spike (that bullishness is priced in and has been since the end\nof last year). It is long-term strength.<\/p>\n\n\n\n

Summary: bullish but priced in. Long-term foundational\nstrength for crypto so perhaps higher lows in btc price during movement.<\/p>\n\n\n\n

\n\n\n\n

Kyle Asman, founding partner, BX3 Capital, a business advisory firm<\/h2>\n\n\n\n

Bakkt won\u2019t have a major impact on the price of\ncryptocurrencies one way or another. The institutions that want to trade it are\nalready doing so, and the institutions that aren\u2019t are going to do so\u2014at least\nnot until clear regulatory guidelines are established.<\/p>\n","protected":false},"excerpt":{"rendered":"

Gary McFarlane, the cryptocurrency analyst at interactive investor, shares his thoughts \u2013 and those of other industry figures and experts \u2013 on Bakkt bitcoin futures. On 23 September Bakkt finally launches its physically settled bitcoin futures product \u2013 institutional customers can start depositing bitcoin from 6 September. But onboarding institutions into crypto is just the first part of the plan from the Intercontinental Exchange (ICE)-backed platform. Just as important to the project\u2019s ultimate success could also be the push into crypto […]<\/p>\n","protected":false},"author":17,"featured_media":568546,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[800,17,21],"tags":[],"_links":{"self":[{"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/posts\/55983"}],"collection":[{"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/comments?post=55983"}],"version-history":[{"count":0,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/posts\/55983\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/media\/568546"}],"wp:attachment":[{"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/media?parent=55983"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/categories?post=55983"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/tags?post=55983"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}