Bakkt Bitcoin options, cash-settled futures blast off

After months of teasing, Bakkt has finally announced the release of two new Bitcoin investment products: monthly options and cash-settled bitcoin futures.

2 min read

Dec 9, 2019

Bakkt is branching out, today expanding the number of Bitcoin investment products that it offers.

The Bitcoin exchange backed by the same owners of the New York Stock Exchange today announced the launch of two new products for its customers: bitcoin monthly options, and bitcoin cash-settled futures.

The bitcoin monthly options are based on monthly bitcoin futures contracts and exist within a fully legislated market—regulated by the Commodity Futures Trading Commission (CFTC)—according to Bakkt. The options are designed to expose investors to trading and hedging and provide them with additional opportunities for garnering income.

The bitcoin cash-settled futures, on the other hand, are available through ICE Futures Singapore and give investors a chance to invest in bitcoin while settling in cash instead of physical bitcoin contracts. The idea is to give institutional players who have little-to-no exposure to crypto a way into investing in digital assets such as Bitcoin.

In a Medium post, Bakkt explained, “These new contracts represent an important milestone in the development of this emerging asset class and our bitcoin product complex… We have great momentum going into 2020 and an exciting product roadmap.”

The launch of Bakkt’s cash-settled Bitcoin contracts comes ahead of schedule, as Bakkt COO Adam White indicated last month that the product would likely not be available until 2020. However, Bakkt’s parent company, the Intercontinental Exchange (ICE), was reportedly in talks with the Monetary Authority of Singapore (MAS) to fast track the launch, and it now appears as if ICE’s work on that front has paid off.

Cash-settled bitcoin futures contracts have been around in the United States for the last two years. They were first introduced by the Chicago Mercantile Exchange (CME) Group in December 2017, though did not make serious headway with investors until earlier this year. CME recently announced plans to launch bitcoin options based on these contracts in Q1 2020.

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