Existing Bitcoin futures exchanges in the U.S. market such as CME and CBOE are cash-settled, meaning that their contracts are settled with the U.S. dollar and not with Bitcoin.
As such, given the limited supply of CME and CBOE contracts, the effect of the two futures market on the actual price of Bitcoin could be minimal.
Kelly Loeffler, the CEO of Bakkt, said that cash-settled contracts have some benefits but a physically-settled Bitcoin futures contracts are necessary to strengthen the infrastructure supporting the asset.
“It’s great to have cash-settled, but there’s a need for physical delivery,” said Loeffler, emphasizing that the objective of Bakkt is to create a comfortable environment for investors to invest in digital assets.
The physical delivery of Bitcoin guaranteed by the Bakkt Bitcoin futures market will provide investors with crypto asset custody and deliver the asset to every investor in the market. Depending on the demand for the asset and the trading activity on Bakkt’s exchange, the scheduled launch of Bakkt in January could affect the supply of the dominant cryptocurrency and lead to an increase in the Bitcoin price.