Saturday, 16 October 2021

Bakkt introduces cryptocurrency

NEW YORK: The parent company of the New York Stock Exchange (NYSE) offer investors the option to trade Bitcoin, giving the pioneer cryptocurrency further mainstream recognition.

Operations will begin at the opening of the electronic financial market at 8:00 pm in New York.

Brokers will then be allowed to trade futures contracts on one of the Intercontinental Exchange’s (ICE) platforms, by betting on increases or decreases in the currency’s value, just as with oil or gold.

The cryptocurrency has been trading at around $10,000 per bitcoin.

ICE’s virtual currency subsidiary, Bakkt, will lead the operation. Launched in August 2018, Bakkt was supposed to begin trading last November but the project was delayed.

It was already possible to buy and sell Bitcoin directly on multiple smaller platforms, but those lacked the historic and official legitimacy of the ICE.

Another major stock exchange – the Chicago Mercantile Exchange (CME) — has since the end of 2017 also offered trading in cryptocurrency futures.

About 7,000 such futures have been traded per day since the beginning of the year, worth a total of more than $350 million per day, at the current value.

But when the CME’s futures contracts expire, clients receive the dollar equivalent of the Bitcoin value. The idea is to prevent investors from owning Bitcoins themselves.

Bakkt’s products are different in that brokers receive Bitcoins directly. They can then decide whether or not to entrust the Bitcoins to Bakkt, in a sort of secure virtual warehouse.

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