Popular cryptocurrency trading and investment platform Bakkt launched its physically delivered Bitcoin futures contracts earlier today, much to the excitement of enthusiasts who had been anticipating it. Now, the company is hoping to clear the air as to why this development could be a watershed moment in the crypto space.
Backing the launch up
Just a few hours after the contracts were launched, Bakkt chief executive Kelly Loeffler released a statement emphasizing the fact that these contracts are the very first physically delivered Bitcoin futures contracts available in the United States. However, the executive also pointed a few other reasons why this initiative, more than what it stands for, is quite a big deal.
Speaking on the prospective increase in cryptocurrency adoption that these contracts could spur, Loeffler reiterated the company’s mission to “expand access to the global economy by building trust in and unlocking the value of digital assets.”
Adoption, adoption, adoption
Essentially, futures contracts are agreements to trade Bitcoin at a specific date and price. When a contract is initiated, both parties abide by its terms, regardless of what the Bitcoin market price is at the date of its expiration.
The peculiarity of the Bakkt contracts, however, is that traders get their Bitcoins when the contracts expire, as opposed to their cash equivalents.
In her statement, Loeffler went on to list some reasons why the product matters. The first of these reasons is the fact that the contracts will be operating a reliable and regulated infrastructure. Expatiating further, Loeffler explained the need for a regulated environment when dealing with digital assets, while adding that they represent value.
“This is brought home by reports of hacking, scams or other headlines highlighting the risks inherent in new markets, and the need for new solutions like Bakkt that help address these concerns,” her statement read.
The second reason why Loeffler lauded this milestone is that they represent an evolution of the financial technology space; an adoption which, amongst many other things, relies on trust. As many within the crypto space understand, the issue of trust has been thrown around quite recently, thanks to the continued increase in scam and hack reports.
However, as Loeffler points out, the Bitcoin futures contracts from Bakkt have been adequately secured with cybersecurity and top of the line encryption, thus sneering that investors can trust crypto-assets as investment vehicles. As she puts it, this vote of confidence will be able to spur the widespread adoption of crypto assets, for both investment and transaction purposes.
Rounding off, Loeffler pointed out that the futures also represent a new and revolutionary way to transfer digital value; something that several companies around the world have been clamoring for. She believes that the futures represent a way to leverage advanced technology to eliminate barriers to asset transfers, thus ensuring that cryptocurrency adoption can also increase as well.
Loeffler continued, “These are the concepts upon which we are building Bakkt. We’re starting with the basics: instilling trust through regulation and secure custody, and deploying products that are transparent and regulated to support their adoption.”
So far, the futures have been doing rather well. Statistics from the Intercontinental Exchange revealed that 55 Bitcoins have already been traded at press time, with the last recorded trading price being $9,922.