Cryptocurrency Derivatives Series: Flurry of Constructive Commentaries Showers on Bakkt’s BTC Futures Trading Mechanism

With the Bakkt’s mission statement, “Expanding access to the global economy by building trust in and unlocking the value of digital assets,”they have gone live as scheduled on 23rdSeptember but with a tepid start of trading just over 70 bitcoins yesterday. These derivatives contracts are regulated, insured, and are physically-settled in Bitcoin. Hence, the ecosystem can work independently without intervention from the dollar or banks. 

There have been series of optimistic commentaries from various industry players.

Thomas Lee, the CEO of Fundstrat has revealed his views on this via twitter handle thathe is “very positive” about the Bakkt launch because of the impact it will have on institutional investment.

While the company also appears to be confident that it is likely to abide by the high level of compliance, ensure surveillance and regulatory standards for digital asset markets.

The CEO, Kelly Loeffler, writes recently on the launch that it’s a significant milestone for the industry, the concepts upon which Bakkt is being built to instil the trust through regulation and secure custody, and thereby, deploying products that are transparent and regulated to support their adoption. She emphasized some key fundamental points

• Reliable and regulated infrastructure matters to investors and consumers alike. Digital assets represent value, and when it comes to tools for managing anything of value, infrastructure reliability can’t be taken lightly.
• Digital currency represents both new technology and new financial instruments, and trust is central to the adoption of both. With operations, cybersecurity and controls, along with end-to-end-regulation demanded by investors and consumers, confidence in using digital currency — not just to invest, but to also use in transacting — will grow.
• Innovative ways of managing and transferring digital value are expanding rapidly. This expansion is happening more quickly than most can keep pace with. Companies, countries and consumers are driving demand for ways to leverage this paradigm-shifting technology.

While the COO of Bakkt, Mr.Adam White beams up with hopes that these futures contracts will lead price discovery, while the major attention is targeted predominantly on the potential for the institutional play through this mechanism, he also kept the door opened for the retail investors, saying “Bakkt is really designed for the institutional trader. So this is a futures contract. That said, we expect this futures contract to trade through retail brokerages as well, so retail clients can trade this contract.”

In yet another case, the senior market analyst at eToro, Mati Greenspan, mentioned through twitter handle, “If a regular exchange is the on and off-ramps to bitcoin, this is an eight-lane superhighway. You certainly aren’t going to judge how good the highway is based on how much traffic it has on opening day.”

Renowned American investor and the co-founder of Morgan Creek Digital Assets, Mr.Anthony Pompliano saidthat, "the more infrastructure that's built around this, the more likely it is to never go away (...) we're at a tipping point now where Bitcoin is here to stay. It’s going to end up being in every institutional investor’s portfolio.”