Bakkt plans to launch a set of digital currency products in 2020, similar to Brent crude oil futures contracts

It's unclear who will lead Bakkt into 2020, but the company's product roadmap is already somewhat clear.


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In a recent blog post, the Intercontinental Exchange company announced that it will launch two new contracts and said it wants to emulate its parent company to provide a set of Brent Crude Oil Futures) similar digital currency products. A week ago, Bakkt CEO Kelly Loeffler was appointed to replace a vacant U.S. Senate seat in Georgia.

Bakkt launched a monthly bitcoin futures contract for physical delivery in September this year, and announced the launch of options related to bitcoin futures in October. It officially went online on December 8. Cash-settled futures linked to Bakkt's first contract also began trading on its Singapore subsidiary. According to the latest data, the trading volume of the new contract has exceeded 1,200 lots.

In contrast, Intercontinental Exchange uses its benchmark crude oil futures to launch several oil derivatives. The company stated:

"We are using similar tactics to expand our product portfolio at Bakkt. Through physical delivery of Bakkt Bitcoin monthly futures, we have a benchmark contract that provides a basis for us to develop complementary products based on customer needs."

In November, Bakkt announced that it would launch cash-settled bitcoin futures at ICE Futures Singapore, which is regulated by the Monetary Authority of Singapore. This marks the first time a regulated U.S. exchange has penetrated the booming Asian derivatives market, and it also shows that Bakkt is not limited to physical delivery contracts that have helped it develop the digital asset market. For cash-settled contracts, traders cannot choose to make physical delivery when the contract expires.

Bakkt also hinted at launching new derivatives in the future.

Maintain contract price integrity

Economist Alex Kruger recently noted that so far, traders seem less interested in physically-delivered Bitcoin futures contracts.

Bakkt's competitor CME Group launched a cash-settled Bitcoin futures contract in 2017, providing traders with the largest regulated cash-settled bitcoin futures market. However, Bakkt's layout may have some advantages. Although CME's futures trading is based on a base index consisting of spot cryptocurrency exchanges, Bakkt's futures trading is based on its underlying futures. This can better maintain the integrity of the price of the contract compared to the CME known for its spread.

Bakkt's launch of the contract in Asia means that it will compete with companies such as CoinFLEX and FTX, two companies that have entered the derivatives market successfully with diversified assets and high leverage. Currently, the unregulated market is dominant in crypto trading in Asia, but some insiders believe that in the long run, the possibility of a regulatory crackdown exists, which is very good for Bakkt.

According to the blog post, by 2020, in addition to trading contract products, Bakkt will continue to expand its hosting services and develop consumer-facing applications.

As for the company's next CEO, it seems that it has not been determined.