According to CCN: Most crypto enthusiasts have been waiting for the launch of the bitcoin Bakkt futures trading platform. Recently, the cryptocurrency community was happy when the ICE-run company announced its official launch date on September 23. Within 48 hours of the major disclosure, bitcoin was up 10%.
Many investors know that Bakkt's entry into the crypto space is increasing the long-term health of bitcoin. However, very few people understand why. If you are not one of them, don't worry, because in this article we'll explain why
1. Bakkt's futures contract will be physically resolved, as opposed to cash payments
Currently, futures contracts are paid in cash. This means that when a contract expires, market participants pay or receive a difference between the price when the future expires in a fiat currency, such as dollars.
Futures on cash payments have little effect on the demand for bitcoin because market participants only buy cryptocurrency, not real money.
This is where Bakkt separates itself from its competition.
For the first time in crypto history, there will be a platform to provide futures contracts, where buyers can expect actual bitcoin delivery. This means that Bakkt must take a large amount of bitcoin from circulation to predict customer needs.
Twitter users CryptoCalls summarize the expected impact of Bakkt's launch:
2. Bakkt provides a compliance system and federal regulations to buy Bitcoin
In the 2017 price hike, bitcoin has climbed to the highest level of all time, about 20,000 dollars. The parabola demonstration was mainly driven by retail money because institutional investors were forced to stay on the sidelines. Large companies such as investment banks that are prohibited or discouraged by investing in assets such as bitcoin have yet to receive approval from regulatory agencies.
With Bakkt, institutional investors now have a platform where they can use part of their managed assets to buy bitcoins. This is because the ICE-run company received approval from the Futures Trading Commission (CFTC) and the New York Financial Services Department (NYFDS). All investments made through Bakkt are legal and tax-compliant.
Jake Chervinsky explains why Bakkt increased long-term prices for bitcoin:
3. Bakkt will facilitate the payment of bitcoin in the retail system
Organizations' funds into bitcoin are just the tip of the iceberg. The real big goal is the widespread adoption of bitcoin as a reliable payment solution. So far, Bakkt has partnered with Starbucks to build a cost-effective system to handle low-volume bitcoin payments.
In the current system, Bakkt immediately converted cryptocurrency into fiat. This is huge because buyers do not have to go through the long process of selling their cryptocurrency through exchange. Above all, traders don't have to worry about market volatility because they receive payments in fiat.
With this system, even people who are not knowledgeable about crypto can easily buy bitcoin and use it as an effective payment solution. This may attract more Bakkt users, which will create more demand for bitcoin. Therefore, Bakkt will create a cycle of rising demand for top crypto.
Bakkt provides a platform for institutional investors to buy physical bitcoin through its legal compliance system. In addition, ICE-owned companies offer a framework where ordinary people can buy cryptocurrency and use it as a payment solution. In other words, Bakkt can meet the demand for the number 1 cryptocurrency. This is why the September launch is a long-term price increase for bitcoin.