Intercontinental Exchange (ICE), the owner of the New York Stock Exchange (NYSE), will note its highly-anticipated bitcoin futures agreement in less than 2 months, on December 12.
Known as a physically-settled daily futures contract, the agreements will be backed by real bitcoins held in ICE’s Digital Asset Warehouse According to a news release, each futures agreement will be verified through ICE Clear U.S., the company’s cleaning location.
The news release states in part:
“Each futures contract calls for delivery of one bitcoin held in the Bakkt Digital Asset Warehouse and will trade in U.S. dollars and others. One daily contract will be listed for trading each Exchange Business Day.”
Launchedin a partnership between ICE– the operator of 23 leading worldwide stock market, consisting of the NYSE– and other family names consisting of Starbucks and Microsoft, the Bakkt endeavor intends to develop an open, certified environment for digital possessions.
Bakkt was created to be a “regulated ecosystem” that supplies security for institutional financiers who wish to get direct exposure to cryptocurrency. At the time of the statement in September, Bakkt had stated the physical bitcoin futures would be traded versus the U.S. dollar, British pound sterling, and euro.
“A critical element to price discovery is physical delivery. Specifically, with our solution, the buying and selling of bitcoin is fully collateralized or pre-funded. As such, our new daily bitcoin contract will not be traded on margin, use leverage, or serve to create a paper claim on a real asset,”Bakkt had stated at the time, reacting to criticisms that the agreements might mask “hidden leverage”
For each purchase of a USD/BTC futures agreement, there will be a shipment of one bitcoin into the owner’s account at settlement. That contrasts with the bitcoin futures markets on CBOE and CME, which are cash-settled, indicating that no real cryptocurrency possessions exchange hands at expiration.
Investorsin Bakkt’s platform consist of Mike Novogratz’s Galaxy Digital, Pantera Capital, and others.