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Beat Bakkt: LedgerX to Launch Physically-Backed Bitcoin (BTC) Futures

Beat Bakkt: LedgerX to Launch Physically-Backed Bitcoin (BTC) Futures 1

LedgerX Can Launch Bitcoin Futures

Just a few weeks back, Bakkt revealed that it would be launching its Bitcoin (BTC) futures product for user testing in late-July. But, it seems that another cryptocurrency exchange has beat the New York Stock Exchange-backed initiative to the punch, so to speak.

Announced Tuesday morning, LedgerX, a crypto asset derivatives platform headquartered in the Big Apple, has received clearance from the U.S. Commodity Futures Trading Commission (CFTC). This regulatory green light will allow the company to list physically-settled BTC futures, which are far different than the paper contracts offered by the CME.

You see, unlike cash-settled futures, those holding ‘physical’ (as physical as a Bitcoin can be anyway) contracts are entitled to receive the underlying commodity when the contract matures, compared to just receiving a cash credit. Many analysts have claimed that this new form of Bitcoin-related asset, whether launched through Bakkt or what have you, will allow for better price discovery, presumably on the upside, especially considering the importance of the futures market today in cryptocurrency.

As JP Morgan analysts recently explained in a note, if you disregard all the exchanges deemed “fake” by analytics companies, you’re left with an interesting picture about the Bitcoin market: cash-settled futures make up nearly half the volume. The thing is, none of the capital flowing into this future actually find their way onto the spot BTC market, reducing buy-side or sell-side pressure.

Now back to LedgerX. According to CoinDesk, chief operating officer Juthica Chou has claimed that her company has no exact timeline, but she noted that LedgerX is looking to be the incumbent in this market. Chou adds that LedgerX intends to “serve customers of all sizes”, hinting that there may be a much-needed retail component to this upcoming product, something that Bakkt is seemingly not focusing on yet.

Bakkt Hard at Work

Despite the fact that Bakkt was kind of beat to the punch, the company is still hard at work. According to a recent report from trade publication The Block, Bakkt has just signed a former Google contractor, Chris Peterson, onto its team. The former UX consultant, according to a “person familiar with the situation”, is likely working on a digital asset wallet, dubbed “Bakkt Pay”.

The Block’s sources say that following the release of the long-awaited financial vehicle, the crypto platform may launch the mobile application. Not many details were given about this product, but the outlet points out that Bakkt’s recently-updated website mentions digital payments. 

This news comes months after The Block broke the news that contrary to skepticism, Bakkt is actually working closely with Starbucks, one of the world’s largest restaurant chains. Per their source, the coffee giant has managed to secure a substantial stake in Bakkt in return for “commitment to allow Bitcoin payments in store in 2019”.

Photo by Rohit Tandon on Unsplash
About author

Nick has been enamored with cryptocurrencies since foraying into the industry in 2013. He has since gotten involved as a reporter, covering news on a number of blockchain- and crypto-related outlets.
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