Based on customer demand, Bakkt is launching its first regulated options contract for bitcoin futures on December 9, 2019, an announcement says. The contract is designed to hedge or gain bitcoin exposure, generate income, and offer cost and capital efficiencies based on the benchmark Bakkt Monthly Bitcoin Futures contract.
This is a major and crucial step towards developing the asset class for institutional investors, their customers and investors, the announcement said.
Already, Bakkt’s parent company ICE has self-certified the contract with the CFTC and is leveraging the benchmark futures prices and institutional grade custody to meet the needs for a regulated options contract.
“We’re committed to bringing trust and utility to digital assets and the options contract is an example of the many products we’re developing for regulated markets,’ the announcement said.
Bakkt has been working with market players since its launch in September to to build liquidity, create market transparency and build open interest. The launch of the contract in December is a major milestone in achieving this goal. It has also completed.
The new contract will come with low fees of $1.25 per options contract in January 2020 after a free trade in the whole of December.
Other features include Margined contracts and cross-margining. Traders will also be able to collaborate with other market participants through ICE chat instant messaging.
Volume Bounces After a Slow Start
Bakkt’s launch was expected to be explosive for Bitcoin price. On the contrary, it was not impressive at all, it even coincided with one of Bitcoin’s worst dips in 2019. However, Bitcoin’s trade volume on the platform has improved.
Yesterday, the trading volume spiked way above the highest ever been recorded since the launch of the platform. It recorded an all-time high 590 contracts of Bakkt Bitcoin Monthly Futures traded.
This signals hope for the crypto community especially because the spike happened on the same day Bitcoin experienced a major dip. eToro’s senior analyst Mati Greespan also gave in his thought on the spike witnessed yesterday.
“Bitcoin futures @bakkt just smashed their all-time highest volumes!! Not that $4.8 million is a lot of money on Wall Street but it’s good to see these contracts gaining traction on a volatile trading day.”
Meanwhile, Bitcoin is yet to fully recover from the dip. Despite the dip, fundamentals such as hashrate remain high, hitting a new all-time high yesterday.
Experts in the market have stated that Bakkt may be playing a key role in the future of the digital currency especially at the time the market looks bearish.
Therefore, the new contract launch is a welcome development.