Intercontinental Exchange Inc (NYSE:ICE), the parent company of the New York Stock Exchange, has announced the launch date for Bitcoin futures on its crypto trading platform Bakkt.
Bakkt Bitcoin daily futures contracts trading is set to begin on December 12, as per ICE’s press release.
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“Each futures contract calls for delivery of one bitcoin held in the Bakkt Digital Asset Warehouse, and will trade in U.S. dollar terms. One daily contract will be listed for trading each Exchange Business Day,” explained ICE.
The crypto platform allows users to trade, store and spend digital assets.
Trading hours in the US will run from 8 PM to 6 PM EPT on every exchange business day.
Bakkt CEO Kelly Loeffler detailed how the trading would work in an August blog post, explaining that Bakkt would feature “a consistent regulatory construct, transparent, efficient price discovery, and an institutional quality pre- and post-trade infrastructure.”
Price discovery refers to the process of setting the price of an asset by evaluating the market supply and demand.
“The concept of “price discovery” might sound bland for something as exciting as Bitcoin. However, trusted price formation is a fundamental part of advancing the promise of digital currencies,” wrote Loeffler.
The CEO highlights how important physical delivery is to price discovery, adding that the buying and selling of Bitcoin is fully collateralized or pre-funded on Bakkt.
Physical delivery is a term used in an options or futures contract which requires the actual underlying asset to be delivered upon the specified delivery date, rather than being traded out with offsetting contracts, as per Investopedia.
As such, the platform does not plan to support margin trading for its BTC contract in order to better support market integrity and separate itself from existing exchanges.
The Chicago Mercantile Exchange and the Chicago Board Operations Exchange launched Bitcoin futures in December 2017.
Contact Lenore Fedow at [email protected]