November 21st, 2018
Bakkt says Bitcoin’s status as a commodity, as well as its high customer demand, are the primary reasons for choosing to begin its cryptocurrency futures trading with Bitcoin. Meanwhile, the platform recently postponed the launch of its BTC futures contract to January 2019.
Bitcoin is King
In a tweet published on Wednesday (November 21, 2018), Bakkt provided answers to why it chose to begin with Bitcoin futures trading. According to the Intercontinental Exchange (ICE)-owned Bakkt, BTC’s status as a commodity and its lion share of the total cryptocurrency market makes it an obvious choice.
We've been asked why we're starting with bitcoin. Here's why:
Bitcoin today accounts for over half of total crypto market capitalization and has been deemed to be a commodity, and its derivatives are regulated in the US by the CFTC… (1/2)
— Bakkt (@Bakkt) November 21, 2018
Earlier in the year, the SEC said that cryptocurrencies like Bitcoin, which could be used in lieu of fiat currencies weren’t securities. Thus, BTC is a commodity, making its derivatives fall under the purview of the Commodity Futures Trading Commission (CFTC).
BTC also has the largest market capitalization in the market. At present, the top-ranked cryptocurrency controls 53.1 percent of the total cryptocurrency market share. For Bakkt, this means adequate enough liquidity with which to build a robust futures contract.
Bakkt Futures Trading Postponed
Despite the above-mentioned merits of a BTC futures contract, Bakkt isn’t ready to launch its product. In a statement released on this week, ICE announced that it was pushing the launch of the Bakkt BTC futures trading to January 24, 2019. Bakkt was previously scheduled to go live in mid-December 2018.
A portion of the announcement reads:
The new listing timeframe will provide additional time for customer and clearing member onboarding prior to the start of trading and warehousing of the new contract.
In a separate statement, Kelly Loeffler, the Bakkt CEO said the postponement was to give the platform time to work out all the kinks so as to ensure a seamless launch process. The January 2019 launch is still subject to regulatory approval.
No 2018 Santa Claus Rally?
Before the onset of the current price crash that began last week, there was talk of an imminent ‘Santa Claus rally’. Technical indicators like the Moving Average Convergence Divergence (MACD) and the Directional Movement Index (DMI) showed signs of a BTC price revival before the end of 2018.
However, the postponement casts some doubt on the possibility of any late bull run in 2018. As at press time, BTC price 00 is still trading below $4,500, 77 percent down from its mid-December 2017 all-time high.