Bakkt Breakthrough: Crypto Platform Reveals First Block Trade of Its Bitcoin Futures
Intercontinental Exchange (ICE) has announced its first block trade of Bakkt Bitcoin Futures.
The high-volume, privately negotiated trade was executed on Tuesday between crypto merchant bank Galaxy Digital and crypto finance company XBTO Group, and was cleared by global financial brokerage firm ED&F Man.
Says XBTO,
“Last week, we bought the first Bakkt Bitcoin Daily Futures contract and took the first physical delivery of a digital asset under existing commodity futures laws and regulations. This week, we executed the first block trade. We’re pleased to report that the launch was successful and can accommodate large trades.”
ICE launched its Bitcoin trading platforming Bakkt last week amidst high expectations following a delayed start.
The first $BTC futures exchange @Bakkt launches today backed by @NYSE parent ICE, $MSFT & others – what does it mean for cryptocurrency pricing now and in the future? @Bakkt COO @WhiteAdamL joins @firstmove to tell all pic.twitter.com/eTUboaAd3b
— Julia Chatterley (@jchatterleyCNN) September 23, 2019
The company notes that the launch has marked several milestones, including the first physical delivery of Bitcoin against a futures contract and now the first block trade, as it promises to deliver on its goal of exposing a wide swath of big investors to Bitcoin. By on-boarding traditional institutional players, Bakkt is expected to jump start a new chapter in the king coin’s trajectory toward full integration into the financial system as a safe haven asset.
Despite Bakkt’s slow start, insiders are suggesting the new platform needs time to grow and shouldn’t be written off as a flop.
According to the team at Galaxy Digital,
“As the digital asset class continues to mature, we view the launch of Bakkt as a foundational piece of market infrastructure.”
Analysts at New York-based investment bank Oppenheimer Holdings wrote in an equity research report released on October 1,
“Bakkt, a venture jointly owned by ICE, Microsoft, BCG, and Starbucks, finally launched its bitcoin futures for trading on September 22, 2019.
There was a vibe that Bakkt’s bitcoin futures could get off to a strong start partly due to: i) ICE CEO Sprecher’s track record of disruption and ii) ICE’s bitcoin futures use of ‘physical delivery’ when the contracts expire.
Even though early trading indicated that volumes for ICE’s bitcoin futures had a slower start than that of CME and CBOE, it comprised only a tiny fraction of ICE’s total volume and earnings. Given that ICE has many other electronification initiatives in fixed income analytics and trading, mortgages, and fixed-income ETFs, we recommend investors not get upset about the current trading volume.”
Adds Oppenheimer,
“At this point, we are not going to judge whether Bakkt’s bitcoin futures will be successful or not, or whether the trading volume of Bakkt’s bitcoin futures will increase in the future.
…
We acknowledge that a massive adoption of bitcoin, or any other digital asset, outside of crypto enthusiasts has a long way to go, but also don’t discount that the initial bitcoin futures trading volume introduced by Bakkt didn’t seem to meet the original expectation.”
While Trabue Bland, president of ICE Futures U.S., says Bakkt has a growing base of participants and clearing firms, Bitcoin bulls are not convinced that the crypto markets need Bakkt or other big institutional players to reach mainstream adoption and a thriving market.
In an appearance on CNBC, crypto venture capitalist Lou Kerner of CryptoOracle dismissed their importance.
“I’ve always thought Bitcoin is not about institutions. Actually, it’s the antithesis of institutions…So we don’t need institutions to come to this party for Bitcoin to break out again.”
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