Cryptocurrency Derivatives Series: A Glance at Features of Bakkt’s Bitcoin Futures Contracts of Daily and Monthly Tenors

Bakkt, with their brand new mechanism of bitcoin futures of physically deliverable facility, is attempting to bring federally regulated price discovery to bitcoin markets. 

With that objective, they have recently opened warehouse for customers’ bitcoin deposits and withdrawals before its launch on 23rdof this month, and it is likely to contribute significant bullish momentum over the longer term as a key institutional onramp into Bitcoin and due to eye-catching partnerships with corporate entities such as Microsoft and Starbucks.

We have listed out the contractual details and features of bitcoin futures, let’s just quickly glance at it.

Contractual details: 

Listed on ICE Futures U.S. and cleared by ICE Clear US 

Settlement price does not rely on any unregulated spot crypto markets 

Margined daily and monthly contracts with ability to go to physical delivery 

Delivers to the Bakkt Warehouse, which is operated a limited purpose trust company regulated by the NYDFS, that will serve as a qualified custodian 

Available on ISVs and WebICE

Contract Features: 

• Contract size: 1 bitcoin 

• Block trade minimum: 10 lots 

• Minimum tick size: $2.50 

• Trading and Clearing: $1.00 per BTC contract and $1.25 per BTM contract (waived through December 31st, 2019) 

•Delivery: $9.75 per contract (waived through December 31st, 2019) 

• Trading hours: 8:00pm to 6:00pm EPT Sunday to Friday 

• Daily settlement: 4:58pm to 5:00pm EPT 

• IP address and withdrawal address whitelisting 

• Annual operational and security audits 

• Market maker programs and volume-based pricingCourtesy: JPM