Bitcoin settled futures products are on the way.
ICE, the parent company of the NYSE announced that they are launching a new company called Bakkt.
The release can be found here:
https://www.coindesk.com/nyse-parent-ices-new-futures-contract-will-deliver-real-bitcoin/
Bakkt will offer the first federally regulated market for bitcoin where the contracts will be physically settled with actual bitcoin.
They are looking to launch as soon as November of this year.
Um, it's about time!
Some info:
The stated goal of ICE is to transform bitcoin into a trusted global currency with broad reach and usage.
Microsoft, Boston Consulting Group, and Starbucks are some of the partners in the new endeavor.
Starbucks even announced that they would create a conversion system where bitcoin can be immediately converted to dollars.
A way for people to use bitcoin to buy things from Starbucks.
This is a major push to boost bitcoin adoption.
Overall, this is very big news.
This will be the first time a futures product will be launched that is physically backed.
It also marks a major push to get retail stores using bitcoin.
It's a double whammy of good news!
(Source: https://www.coindesk.com/ice-exchange-unit-seeking-to-list-bitcoin-futures-etf/)
The physically backed futures contracts are a double edged sword.
On the one hand people have suggested that the current futures products have been used to manipulate bitcoin prices, though it is hard to see any direct link, considering they are cash settled.
Which basically means the futures contracts are merely a bet on the price of bitcoin, no bitcoin ever actually changes hands.
Though there is the argument that bad actors could manipulate the spot markets in order to make their futures contracts profitable.
Now with a physically backed futures contract, bitcoins will be deliverable on expiration of contracts.
That could potentially drive huge demand if institutional level investors deem that the ICE futures contracts are secure enough to warrant using them for exposure to bitcoin.
That would be one of the most secure ways for investors to gain bitcoin exposure in their portfolios.
My thoughts:
I think this is very good news for bitcoin overall.
It sounds like they are making a major push to get bitcoin mainstream, which should only help increase prices.
The physically settled futures contracts can be a blessing and a curse, we will see how they get used in the near future.
I feel more comfortable than ever buying bitcoin today, and it being worth more a year from now, than I have in a while.
Stay informed my friends.
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