Bakkt is launching Bitcoin (BTC) Options & a Crypto retail App
The institutional digital trading platform will enable consumers to transact in digital currencies
A recent commentary by the Chinese President emphasizing the importance of blockchain technology and stating its integration was essential to the digital transformation taking place has lifted the sagging prices of the cryptos, at least for now. Although Chinese officials were quick to denounce equating blockchain with cryptocurrencies, nonetheless, it was enough to lift the price action in blockchain-based cryptos.
Not only was the premier digital Bitcoin able to bounce almost 30% from its medium-term support level of $7300 crossing the psychological $10K barrier in the immediate reaction to the above statement, but Bakkt physical bitcoin futures volume also shot through the roof beating all the previous highs (chart below).
Despite a very slow start to the business, Bakkt platform has begun to show promise with the recent uptick in daily trading volume. In fact, the digital trading platform seems to be more than optimistic about Cryptos with the launch of a couple of other products, one of whom is geared towards retail consumers.
The first one is the Bakkt Bitcoin Options contract based on the benchmark Bakkt Monthly Bitcoin Futures contract, developing yet another asset class for the institutional investors as per the announcement. As with regular options, the new product is geared towards hedging against bitcoin or gaining exposure to the premiere digital coin. The European style options, which reduces operational expenses by avoiding early exercise will have a host of other features:
- Capital efficiency associated with margined contracts
- Cash or physical settlement
- Wider distribution & better liquidity with a global outreach
- Lower fees of $1.25/options contract (1 contract = 1 bitcoin)
- An Instant messaging platform for market participants
- Options analytics to offer options analysis & risk management
The slated release of Bitcoin options by Bakkt for December 9th comes on the heels of a similar product launch by the CME (Chicago Mercantile Exchange) earlier, which is expected to start trading in Q1 2020. Bakkt actually is going a step further with its offerings by announcing the launch of a consumer App for mobile payments involving cryptos.
As per the blog post, the endeavor is geared towards allowing the use of digital currencies for everyday transactions, thus unlocking the true potential of digital assets. This is also important since the platform is bringing something for retail users thus solidifying its mission to innovate in the digital payments arena.
The integration of innovative trading products related to digital currencies in the mainstream financial markets is an important indication of the increasing adoption & acceptance of the new digital asset class by institutional & retail investors alike.
Before I let you go, here are some of the other crypto trading products that might be of interest to you.
Published at Sat, 02 Nov 2019 00:42:14 +0000
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