“Each futures contract calls for delivery of one bitcoin held in the Bakkt Digital Asset Warehouse, and will trade in U.S. dollar terms. One daily contract will be listed for trading each Exchange Business Day.”
The statement aligns with the September statement which stated that the firm’s “first contracts will be physically delivered BTC futures contracts versus fiat currencies” such as the US dollars, pounds sterling and euros. Bakkt will not offer margin trading facility on its BTC contract.
By abstaining from margin trading, leverage and cash settlement, the platform will allegedly offer improved market integrity and permit the “trusted price formation,” which it believes as the key to “advancing the promise of digital currencies.” In December last year, the Chicago Mercantile Exchange (CME) and the Chicago Board Operations Exchange (CBOE) launched Bitcoin futures.
Furthermore, this summer, the Federal Reserve Bank of San Francisco penned an Economic Letter specifying that “the rapid run-up and subsequent fall in the price after the introduction of futures does not appear to be a coincidence” and “it is consistent with trading behavior that typically accompanies the introduction of futures markets for an asset.”