It was just announced on Friday that the owner of the New York Stock Exchange (NYSE), Intercontinental Exchange (ICE), will list a physically-settled bitcoin futures contracts and also form a new company which sole purpose is to make bitcoin a mainstream financial asset.
ICE Launching Physically Settled Bitcoin Futures Platform
ICE revealed their new platform, Bakkt, which has been developed in partnership with some major Fortune 500 companies such as Microsoft, Starbucks, and BCG.
Bakkt is set to launch in November, 2018, and will be fully integrated with the ICE’s U.S. futures market and clearinghouse to list a physically-settled- one-day bitcoin futures product, which includes physical warehousing managed in-house by ICE. It must first be cleared by regulators, but with ICE behind the project that shouldn’t be too large of an obstacle.
Since the Bakkt platform is managed in-house by one of the largest names in the financial space, institutional investors such as pensions, endowments, and insurance companies will be more likely to use on this rapidly expanding but not yet user friendly asset class.
The fact that ICE will serve as custodian for all assets stored on the Bakkt platform means that institutional investors (pensions, endowments, insurance companies) will feel more comfortable to make a gamble on this rapidly expanding asset class. As first reported by CCN, analysts and those with knowledge of the institutional investing landscape had consistently fingered a lack of a trustworthy, respected, regulated custodian as the primary reason that institutions weren’t yet buying cryptocurrency.
“Bakkt is designed to serve as a scalable on-ramp for institutional, merchant and consumer participation in digital assets by promoting greater efficiency, security and utility,” said Kelly Loeffler, CEO of Bakkt. “We are collaborating to build an open platform that helps unlock the transformative potential of digital assets across global markets and commerce.”
However, far from just a bitcoin futures exchange, Bakkt — whose other investors include Microsoft subsidiary M12, Fortress, Susquehanna, Pantera Capital, and Galaxy Digital — is intended to be a full-fledged platform that helps digital assets evolve into a mainstream financial asset class.
“In bringing regulated, connected infrastructure together with institutional and consumer applications for digital assets, we aim to build confidence in the asset class on a global scale, consistent with our track record of bringing transparency and trust to previously unregulated markets,” said Jeffrey C. Sprecher, founder, chairman, and CEO of Intercontinental Exchange.
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