All this hype about the Bakkt futures contact but what does it actully entail. Today according to the Bakkt website only 44 contracts were traded. So it was a slow start but it will take a while for this contract to pick up. The data needs to be available to more customers and more brokers will need to list the product for it to become more popular. So we are only at the beginning.
Let's get into the explanations:
The Bakkt futures contract is great because the contract is physically backed by Bitcoins at the Bakkt warehouse.
What this means is every contract bought on margin will have a full Bitcoin equivalent in storage.
They are listed on ICE Futures U.S. and cleared by ICE Clear US with market opening and closing hours of:
NEW YORK: 8:00 PM - 6:00 PM (next day) 20:00 - 18:00
Pre Open :7:55 PM 19:55
LONDON: 1:00 AM - 11:00 PM (next day) 01:00 - 23:00
Pre Open :12:55 AM 00:55
SINGAPORE: 8:00 AM - 6:00 AM (next day) 08:00 - 06:00
Pre Open :7:55 AM - 07:55
Settlement price does not rely on any unregulated spot crypto markets - This is great as it means that individual exchanges can no longer interfere with the price. If you trade Bitcoin on an exchange you are at the mercy of thier prices. Now with the Bakkt exchange, the prices are aggregated from a few major exchanges so in theory, you should always receive a fair price.
Margined daily and monthly contracts with the ability to go to physical delivery - This means if you want to take full delivery of the Bitcoin at the expiry period you can. So if you own two Bitcoin contracts at the start of the month and do not want to roll over the futures contract you can actually take full delivery of your Bitcoins. The coins are delivered to the Bakkt Warehouse, which is operated a limited purpose trust company regulated by the NYDFS, that will serve as a qualified custodian.
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