The price of Bitcoin, as well as most of his colleagues in the alternative corner is located in the sideways movement. The market smells of more to bear than bull. That could change in November. According to the plans of Bakkt then the trade physically-backed Bitcoin Futures.
Bitcoin Futures? There’s already!
Known Bitcoin Futures are already old hat – at least in the crypto-era. Finally, CBOE has already on 10. December of last year, for the first time allows the trading of Futures and therefore, at the time, CME and a trick hit. The price of Bitcoin, which was already on an upward trend, then reacted to the CBOE notice with an electrifying rate jump of around 11,500 US dollars (4.12.2017) to about 16,800 U.S. dollars (5.12.2017). When a few days later, the competition from CME threw their futures on the market, the price broke the 20,000-U.S.-Dollar mark.
Such a signal went out from the Bakkt announcement on 3. August, however, is not. And, although there is between the Bitcoin Futures of Bakkt and the CBOE or the CME offered Futures a crucial difference: The Futures contracts of Bakkt to be “physical”.
Bitcoin change the owner
Futures, forward contracts are generally agreements for the purchase or sale of a commercial item to a specific (future) date and at a previously agreed price. You have the choice between two positions: Long Position and Short Position. In the case of the former undertakes to purchase the Assets (trade object) if, on the expiry of the contract. Accordingly, the Short Position represents a commitment to sell the asset at a specified time.
In the case of Bitcoin Futures there are futures contracts where the underlying Asset is Bitcoin. This does not mean, automatically, that after the expiration of a contract, Bitcoin. So are the Futures only to futures contracts with cash settlement (cash settlement), on the price of Bitcoin betting.
It is different with the Bitcoin Futures of Bakkt: Here it is futures contracts, for the execution of the Asset (here: Bitcoin) and the possession goes right to the owner. That is, the Short Position is obliged, after the expiry of the contract, the counterparty, the predetermined amount of Bitcoin to the pre-agreed price to sell and “physically” (if you are at Bitcoin talk of can) provide. The Bitcoin should be in the course of time higher than the agreed price, the Short Position loss. According to good Deal for the Long Position.
Bakkt promises high market integrity,
25. September Bakkt on Twitter specifically:
“Our first contracts will be physically transferred by the end of Bitcoin futures contracts against Fiat currencies such as USD, GBP and EUR. If you buy, for example, a USD/BTC Futures contract, which leads to a daily Transfer of a Bitcoin to the account of the customer.“
Our first contracts will be physically delivered Bitcoin futures contracts versus fiat currencies, including USD, GBP and EUR. For example, buying one USD/BTC futures contract will result in the daily delivery of one Bitcoin into the customer’s account.
— Bakkt (@Bakkt) September 25, 2018
The Whole thing should play out in a highly regulated environment. So Bakkt wants to reduce in the case of institutional investors, the threshold for entry into the crypto market. In addition, the waiver of Margin Trading to ensure market integrity. So Bakkt-CEO Kelly Loeffler described on 20. August, in a Medium Post, the benefits of Bitcoin-Futures:
“In particular, the buying and selling of Bitcoin is protected with our solution, in full or financed. Therefore, our new daily Bitcoin contract is not traded on margin, it is used no leverage and not have the opportunity to collect a paper claim on a tangible asset. This supports the integrity of the market and distinguishes our efforts from existing Futures and crypto-exchanges that allow for margins, Leverage and Cash Settlement. In conjunction with a secure, regulated Warehouse solution, you can see how this market can help infrastructure institutions and consumers, to the asset class.“
The introduction of Futures could give the course from its early winter sleep – yet of course, however, is a still unimpressed. Well possible, that the Lessons of the past year resonated in the investors ears.