Bakkt Enters the Options Market with Regulated Bitcoin Futures Contract

Bakkt’s Exciting New Offering

On October 24, Bakkt made headlines by announcing the launch of the first regulated options contract for Bitcoin futures, set for December 9. This groundbreaking product aims to add a new layer of sophistication to Bitcoin investment by providing options that are not just innovative, but also compliant with regulatory standards.

A Certified Game Changer

Bakkt’s Bitcoin Options contract has been certified by the CFTC, ensuring that it meets rigorous standards for financial instruments. This lends a sense of security to investors who may be hesitant to dip their toes into the volatile waters of cryptocurrency trading.

Core Features of the Options Contract

• Capital Efficiency: Designed to make the best use of capital while minimizing risk.
• Settlement Options: Investors can choose cash or physical settlement depending on their strategy.
• European-style Options: These options reduce operational burdens and limit early execution, making them simpler to manage.
• Low Fees: Starting January 2020, Bakkt will charge a modest $1.25 per options contract following a fee waiver in December.

Built from Customer Feedback

According to CEO Kelly Loeffler, the motivation behind this new offering comes from customer feedback, indicating a strong demand for tools to effectively hedge or gain exposure to Bitcoin. She mentions that the new product is crafted to deliver just that.

Impact of Bitcoin Futures on Trading

A day before the announcement, Bakkt saw an astonishing spike in its Bitcoin futures trading volume, hitting an all-time high with 452 BTC futures contracts traded. However, not all news was rosy; Bitcoin’s price experienced a wild ride, plummeting $500 in just five minutes, leaving many investors gasping.

Block Trades to Enhance Liquidity

In another strategic move, Bakkt will facilitate block trades using ICE Block, which is expected to boost liquidity further and enhance the trading experience for institutional investors. This integration demonstrates Bakkt’s commitment to innovation and operational efficiency.