The Intercontinental Exchange (ICE) announced today that its Bitcoin Futures trading platform, Bakkt, will be launching a cash-settled contract. Starting from December 9th, they will be listed on the ICE Futures Singapore. It’s interesting to see how and if this will have an impact on Bitcoin’s price, given what has happened before.
Bakkt Futures Contract on ICE Singapore
ICE, the owner of the New York Stock Exchange (NYSE), revealed the upcoming launch earlier today. Bakkt’s cash-settled Bitcoin monthly futures contracts are already cleared by ICE Clear Singapore and are reportedly ready to be listed on ICE Futures Singapore on December 9th.
According to the President and COO of ICE Futures and Clear Singapore, Lucas Schmeddes, these contracts will provide a more suitable way for Asian investors to enter the Bitcoin market:
“Our new cash-settled futures contract will offer investors in Asia and around the world a convenient, capital-efficient way to gain or hedge exposure in bitcoin markets. Building off the success of our deliverable futures contract, the cash-settled futures will leverage ICE’s regulated, globally-accessible market to offer a safe, secure, and compliant environment for the trading of Bitcoin.”
Additionally, Bakkt’s cash-settled Bitcoin monthly futures contracts will be settled according to the data from the physically delivered Bitcoin futures contracts.
Will This Impact Bitcoin’s Price?
As far as prices go, the news might sound bullish on the surface, but previous data could tell a different story.
The cryptocurrency market noted arguably the most notable price surge back in December 2017, when Bitcoin touched the $20,000 mark briefly. Interestingly enough, in the same month, the Chicago Mercantile Exchange Group (CME) and Chicago Board Options Exchange started offering cash-settled Bitcoin futures contracts on their platforms. In the following months, the whole market collapsed, resulting in Bitcoin ending 2018 at less than $4,000.
The San Francisco Federal Reserve published a research showing that the bearish movement might have been linked to the involvement of CME and CBOE. According to it, the listings of futures contracts are responsible for the price drop as they are directly tied to Bitcoin’s value.
It’s also worth noting that shortly after the disappointing launch of the Bakkt Bitcoin futures trading platform earlier this year, the whole market went through another serious collapse.
It’s still unclear whether or not futures contracts have a direct effect on the price of cryptocurrencies. But in any case, it will be interesting to follow the events after the launch of the cash-settled Bakkt Bitcoin Monthly Futures contract on ICE Futures Singapore.