• The American cryptocurrency exchange Bakkt announced yesterday that it will offer Bitcoin option contracts from 09 December 2019.
• On October 23, 2019, Bakkt recorded the largest trading volume of Bitcoin futures since its launch a few weeks ago.

Bitcoin Futures trading on Bakkt started off weakly with a low trading volume. However, many industry experts advised calmness, as many investors initially wanted to watch and study the current development. In the last few days it looks as if the experts are right. Bakkt’s trading volume continued to rise and reached a new record high. Furthermore, Bakkt has announced that it will introduce further innovative financial products.

Bakkt Introduces Bitcoin Option Contracts

Bakkt officially announced yesterday that the first regulated options contracts for Bitcoin futures will start on December 09, 2019. The Bakkt Bitcoin options contract is based on the benchmark Bakkt Monthly Bitcoin futures contracts and represents another important option to invest in this asset class. According to the company’s own statements, institutional investors are expected to benefit most.

In compiling this new contract, Bakkt is guided by the feedback of the platform’s users and the wishes and needs of other business partners. The Intercontinental Exchange (ICE) Futures U.S. has certified the option contract in cooperation with the Commodity Futures Trading Commission (CFTC). Accordingly, the designed option contract fulfils all legal requirements for an option contract regulated according to American law.

Bitcoin option contracts are characterised by a number of special features. The options are included in Bakkt’s monthly Bitcoin futures contracts, with the possibility of introducing, closing or physically delivering positions. Furthermore, ICE Futures US markets are accessible worldwide and have dedicated market makers to support liquidity.

In addition, Bakkt will not charge any fees at launch until the end of the year. From 01.01.2020, only a small fee of USD 1.25 per Bitcoin option contract will be charged. Bakkt offers tools (ICE Option Analytics) to support the valuation, analysis and risk management of options. There is also an ICE chat where market participants can exchange views.

Bakkt Sets New Trading Record for BTC Futures

On October 23, 2019, the Exchange recorded a new record of 590 contracts traded in Bakkt Bitcoin Monthly Futures with a value of USD 4.8 million. Industry experts, such as eToro Mati Greenspan’s senior analyst, agree that these are not large amounts of capital for Wall Street, but this is a positive development. CEO Kelly Loefller was also pleased to see another milestone reached in physical covered Bitcoin futures contracts.

Bitcoin futures @bakkt just smashed their all time highest volumes!!

Not that $4.8 million is a lot of money on Wall Street but it's good to see these contracts gaining traction on a volatile trading day. https://t.co/4riXgukOeQ

— Mati (@MatiGreenspan) October 24, 2019

Due to the coincidence in time between the falling Bitcoin price and the increase in trading volume on 23 October 2019, some members of the Bitcoin community saw a causal link. However, since the volume is to be classified as very low at just under USD 4.8 million, this assumption can be largely dispelled. We have reported in detail on possible correlations and causal causes at this point.

Bitcoin’s price has stabilized close to the USD 7,500 mark and has moved sideways (+0.73%) within the last 24 hours.

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