Bakkt Provides Specifics on Bitcoin Futures Contract Ahead of July Test Schedule

The Intercontinental Exchange’s upcoming bitcoin platform Bakkt considers testing of its two futures contract beginning July 22.

In a blog post published on Thursday, chief operating officer Adam White said that the platform will “initiate user acceptance testing” for its bitcoin futures contracts, which its parent company will list and trade. Bakkt revealed last month that it would start testing in July, though it did not disclose particular details at the time.

Aside from announcing the date, ICE offered new details for Bakkt’s monthly contract, along with the updated contract specifications for its daily contract.

Both contracts will witness a minimum price fluctuation of $2.50 per bitcoin (with each contract containing one bitcoin). Trades may be facilitated at $0.01 per bitcoin, with a listing cycle that can be stretched up to 12 months (for monthly contracts) and 70 consecutive eligible contract dates (for daily contracts).

Bakkt Warehouse will carry the final settlement for both contracts.

ICE initially revealed in 2018 that it would be introducing physically-settled bitcoin futures contract. Unlike cash-settled contracts that CME Group provides, clients get an actual bitcoin on the expiration of the contract and not the fiat conversion.

White wrote that the mission of Bakkt is “ to support the development of trusted infrastructure for securely transacting in the new market for digital assets.”

The exchange revealed probable launch dates last year and early this year, though bot schedules were delayed because of problems with regulatory approvals. Bakkt’s plan to warehouse its own bitcoin and clear trades via the ICE clearinghouse.

Bakkt has not yet revealed a final launch date.

The company initially announced last month that it was self-certifying its futures contracts, which consisted of a daily contract that was earlier revealed and a monthly contract that was not.

“This is no small step,” White exclaimed. “This launch will usher in a new standard for accessing crypto markets.”

“Compared to other markets, institutional participation in crypto remains constrained due to limitations like market infrastructure and regulatory certainty. This results in lower trading volumes, liquidity, and price transparency than more established markets like ICE’s Brent Crude futures contract, which has earned global trust in setting the world’s price of crude oil,” he added.