Bakkt launches a forward-looking look at how the “Crystal New York Stock Exchange” starts the bull market

With the official launch of Bakkt, it has been less than two weeks left.

Since August 17, the official blog of the encrypted trading platform Bakkt announced that Bakkt has been approved by the New York State Department of Financial Services (NYDFS) and plans to launch the bitcoin futures contract on September 23. In less than a month since then, Bakkt has announced the launch of the Bitcoin storage service Bakkt Warehouse. In recent days, the Intercontinental Exchange (ICE) has announced the Bakkt Bitcoin futures margin requirement.

Undoubtedly, with the license plate, the last piece of Bakkt compliance has been collected. At this point, Bakkt has finally cleared all obstacles, just waiting for the line.

Bakkt positioning, business

Due to the importance of Bakkt, before this, the reporter has repeatedly elaborated on the background and development of Bakkt. And as Bakkt will finally be online, the following reporters listed some brief descriptions of Bakkt:

background

Bakkt parent company is the world's third largest futures exchange ICE. Due to its strong financial strength and background, the project has won the favor of many investment institutions. Previously, in January 2019, Bakkt announced a $182.5 million financing from a group of well-known investment institutions. These include 12 institutions including the Boston Consulting Group, CMT Digital, Eagle Seven, Intercontinental Exchange, and Microsoft Ventures.

Physical delivery

Unlike the Chicago Mercantile Exchange CME and the Chicago Board Options Exchange CBOE, Bakkt will settle in kind rather than in cash. This means that when the purchased contract expires, the market participant pays in legal tender or receives the difference at the expiration of the futures. This will cause Bakkt to extract a large amount of bitcoin from the circulation of Bitcoin to meet the needs of customers. This will have a real impact on bitcoin prices. In addition, physical delivery is more recognized by investment institutions than cash settlement.

Two futures contracts

At present, Bakkt provides two futures contracts. One is to settle the bitcoin futures contract daily. After the daily trading, the exchange will settle the profit and loss, transaction margin, handling fee, tax and other expenses of all contracts at the settlement price of the day. Enable customers to trade on the same day market.

The second is the monthly Bitcoin futures contract, which will enable the trading of the previous month and forward pricing curves. One of the biggest advantages is the one-day futures contract. Simply put, you trade Bitcoin futures on Bakkt, and you can get real bitcoin on the second day of liquidation.

Futures deposit

It is understood that in the futures market, traders only need to pay a small amount of funds at a certain rate of the futures contract price as a financial guarantee for the performance of futures contracts, and can participate in the trading of futures contracts, which is the futures margin.

ICE Futures US, the trading platform for Bakkt's physical delivery bitcoin futures contract, announced its initial hedging and speculative requirements for customers and the monthly additional interest rate in a new announcement on Tuesday.

According to the notice, Bakkt requires the initial hedging margin for the customer's daily and monthly futures contracts to be $3,900. The initial requirements for speculative futures will be slightly higher at $4,290.

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In addition, ICE also announced Bakkt's monthly premium rate.

According to the announcement, the hedging rate for monthly and daily futures contracts is $400-1000, but speculative interest rates will fluctuate between $440 and $1100.

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transaction fee

In order to attract more user transactions, Bakkt announced that it will not charge any fees until January 1, 2020. Starting January 1, 2020, it will charge the following fees:

Screen trading: The daily futures contract is $1, and the monthly bitcoin futures contract is $1.25.

ETP and block trades: a daily futures contract for $1.6 and a monthly bitcoin futures contract for $25.

Delivery fee: Bakkt will charge a contract for the delivery of two futures for $9.75.

Clearing, settlement, custody, the most compliant in history

In fact, Bakkt has always been committed to establishing new compliance standards for the encryption industry. To this end, in addition to ensuring that its own business is quite rigorous, in terms of regulation, Bakkt has worked hard enough.

The license is mainly reflected in 3 points: clearing, settlement and custody. Due to the background of its parent company, Bakkt's process is quite rapid in terms of clearing and settlement of licenses. The NYDFS approved in August this year is a trust license.

Due to the license, the above three different businesses correspond to different platforms.

The transaction will take place at ICE Futures, an ICE US futures platform.

The settlement will take place at ICE Clear, the clearing platform of ICE Futures.

Bakkt's current core business is hosting.

Business hours

Bakkt pre-set the trading hours. The US Eastern Time is from 8:00 pm to 6:00 pm, London time is from 1 am to 11 pm, and Singapore time is from 8 am to 6 am. It's all from Sunday to Friday.

Attracting institutional funds to enter

“When the physical delivery of the Bakkt Bitcoin futures contract was launched on September 23, we will create the first fully compliant market designed to meet the needs of institutional companies and their customers.”

If the main promoter of the cryptocurrency market was retail investors, then the emergence of Bakkt opened the door to the cryptocurrency market for investment institutions. This is one of the main reasons why Bakkt is known as a bull market engine.

In fact, not only Baakt CEO Adam White, including all parties, believes that Bakkt can be a catalyst for institutions to participate in the encryption market.

Prior to this, Dovey Wan, the founding partner of Primitive Ventures, explained that Bakkt will launch bitcoin futures contracts on September 23 for four reasons: 1. Physical delivery requirements from existing Bitcoin circulation Continue to purchase Bitcoin to complete the delivery. 2. Bakkt designed a day of futures, which is basically close to the spot, the delivery speed will be very fast, and the liquidity can be expected. 3. Bakkt is unable to print counterfeit currency, water injection, opponent disk, pin and other trading operations, so it is a normative example for the entire industry. 4. The largest channel for compliance agencies to enter.

Jake Chervinsk, General Counsel of Compound Finance, also said, “It provides a way for large, risk-averse organizations to purchase and host Bitcoin with CFTC and NYDFS-approved end-to-end regulatory systems, and gain a good reputation from ICE. Support. The regulars are very happy."

Encrypted trader Scott Melker said that Bakkt's news "can be said to be the most promising event in the history of bitcoin for institutional investors", these futures will require holders to "produce actual bitcoin or from the exchange Accept delivery." The new contract will require the actual purchase of BTC, which is quite different from the model used by CME, which settles the fee in cash. This means that when investors want to participate in the Bakkt market, they will create buying pressure in the bitcoin spot market.

It can be seen that everyone is optimistic about Bakkt mainly because of its compliance and physical delivery, and from the market participation in Bakkt, since Bakkt announced the launch of Bakkt Warehouse, just three days, hosted in Bakkt The currency already has $125 million in policy protection.

However, for the time being, the upcoming launch of Bakkt has not brought significant changes to the market. As cryptocurrency analyst Joseph Young said, the positive “Bakkt will launch a physical settlement of bitcoin futures contracts” seems to have been digested by the market ( Maybe investors are already tired.) Since Bakkt has decided to launch a physical settlement of the Bitcoin futures contract, after its launch, it will really show whether there is a huge demand in the market.

Original: Sharing Finance Neo