Bitcoin’s ‘cash-settled’ futures market is coming to Singapore. ICE, the operator behind Bakkt’s BTC futures firm, has chosen to offer this new product, which will be traded on ICE Futures Singapore.
Bitcoin Cash Settled Futures Appeals to Institutional Clients
Bakkt has achieved exponential growth with physical delivery futures, but the international expansion chose the cash-settled route. The move was announced just as the Singapore Money Authority announced its readiness to regulate crypto trading, opening a research period until December 20.
For the Singapore market, the futures will derive information from the Bakkt physical delivery 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,” said Lucas Schmeddes, President & COO of ICE Futures and Clear Singapore.
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.
After a period of discussion and approval, the ICE Singapore will list the futures on December 9. The scheduled day arrives just a day after Bakkt launches options on futures for the US market.
Bakkt Futures See Constant Demand Growth
Demand for Bakkt futures has grown slowly over the past month, showing volatile daily interest in terms of contracts and physical BTC traded. For Bakkt, the daily activity is steady above 1,000 BTC.
Daily summary of Thursday’s Bakkt Bitcoin Monthly Futures:
📈 Traded contracts: 1648 ($12.41 million, +10%)
🚀 All time high: 1756 (11/8/2019)
💰 Open interest: $1.36 million ()
— Bakkt Volume Bot (@BakktBot) November 22, 2019
Futures markets are seen as the new source of liquidity for Bitcoin price discovery. Cash-settled futures avoid the need to hold BTC, although Bakkt Custody offers that option. However, a fully approved futures market avoids the pitfalls of using BTC and possibly facing problems with the origin of coins.
Institutional and international interest in Bitcoin trades has grown over the past years, despite slower retail demand and diminished general popularity. BTC is still volatile and has not recovered its December 2017 peak, but institutional interest has not abated.
Bitcoin futures will also help offset BTC’s still relatively high volatility. Bakkt marked record volumes just as BTC returned to volatility in October, and in the past four weeks swayed between lows of $7,400 and highs above $10,000.
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Images via Shutterstock, Twitter: @BakktBot