No Margin Trading for Bakkt Bitcoin Futures, Says CEO


Kelly Loeffler, the CEO of Bakkt, has announced that the company will not offer margin trading for its Bitcoin futures contracts. This announcement is sure to differentiate Bakkt’s offering from what is currently available as far as the BTC futures market is concerned.

No Margin Trading

In a Medium blog post released yesterday, the Bakkt CEO said:

“A critical element to price discovery is physical delivery. Specifically, with our solution, the buying and selling of Bitcoin is fully collateralized or pre-funded. As such, our new daily Bitcoin contract will not be traded on margin, use leverage, or serve to create a paper claim on a real asset. As such, our new daily Bitcoin contract will not be traded on margin, use leverage, or serve to create a paper claim on a real asset. This supports market integrity and differentiates our effort from existing futures and crypto exchanges which allow for margin, leverage and cash settlement.”

For Bakkt, the need for these provisions is hinged on a desire to exhibit integrity. The move is also meant to distinguish its futures contracts from others in the market.

Loeffler believes such an approach will incentivize institutional investors to engage with the Bakkt BTC futures contracts. Many pundits agree that big-money players need to enter the industry for the market to begin the next phase in its evolution.

Suggested ReadingLearn more about Bitcoin in our ‘What is Bitcoin?‘ beginner’s guide.

Bakkt Will Bring Seamless Bitcoin Investment to Institutional Investors

About a fortnight ago, Intercontinental Exchange (ICE), the operators of the New York Stock Exchange (NYSE), announced the launch of Bakkt–“an open and regulated global ecosystem for digital assets.” While the news of the announcement failed to spark much of a revival in the market, the Bakkt premise is undoubtedly significant news for the industry.

According to the company, reactions have poured in since the announcement of the launch. Loeffler expressed confidence that the combined efforts from the partners in the enterprise will help Bakkt achieve its stated aims. Companies like Starbucks, Microsoft, and BCG lead the list of marquee organizations involved in the enterprise.

Bright Future Ahead for Cryptocurrency?

Despite the decline in the cryptocurrency market since the start of 2018, Loeffler remains optimistic about the future of cryptocurrency. Based on today’s blog post, the Bakkt CEO recognizes the 70 percent peak-to-trough slide experienced in the market since hitting stratospheric figures in late 2017. However, Loeffler also draws attention to the influx of institutional money flowing into the cryptocurrency and blockchain industry. Loeffler suggests this could be a sign of better times on the horizon.

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