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<blockquote class="pullquote align-left"><strong>The digital asset platform Bakkt has one feature which the market has been “shouting for” according to CEO of an institutional Forex exchange.</strong>
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<h4><center><strong>This is What The Market Has Been Shouting For</strong></center></h4>
David Mercer, CEO of LMAX Exchange – the institutional exchange for global Forex trading as well as the operator of cryptocurrency exchange LMAX Digital, <a href="https://www.businessinsider.com/bitcoin-platform-by-ice-could-lure-wall-street-institutions-2018-8" rel="noopener follow" data-wpel-link="exclude">thinks</a> that Bakkt’s 1-day futures contract which physically delivers bitcoin is the game changer the market has been looking for.
Unlike cash-settled futures contract where the trader receives or pays the difference between the price 00 at which he purchased the contract and the price of its settlement, physical-settled ones reward the trader with a physical Bitcoin.
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According to Garret See of the investment firm DV Chain, this makes trader a lot less risky and it also facilitates better arbitrage trades. Fundstrat’s Tom Lee also holds that this is a substantial advantage over existing cryptocurrency exchanges like Binance and Coinbase.
This feature of Bakkt, though, resembles the commodity-backed VanEck/SolidX bitcoin ETF proposal – arguably making the latter redundant.
<h3><center><strong>“A Pretty, Big Deal”</strong></center></h3>
Physically-settled bitcoin futures would also mark a key development in the market because they would require a bitcoin infrastructure to transfer cryptocurrencies. Furthermore, they would also require the go-ahead from the Commodity Futures Trading Commission (CFTC).
Bakkt is intended to have all of the above handled:
<blockquote class="pullquote align-center">As an initial component of the Bakkt offering, Intercontinental Exchange’s U.S.-based futures exchange and clearing house plan to launch a 1-day physically delivered Bitcoin contract along with physical warehousing in November 2018, subject to CFTC review and approval. – Bakkt Official Release.
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Patrick Rooney of Trading Technologies commented on the matter, saying:
<blockquote class="pullquote align-center">That’s massive. A very, very big deal.
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<blockquote><img class="alignnone size-large wp-image-51241" src="https://247cryptonews.com/wp-content/uploads/2018/08/ices-bakkt-paves-way-for-institutional-investors-experts-hold-1.jpg" alt="Novogratz Invests $15 Million in White-Label Cryptocurrency Exchange Startup" width="980" height="613" /><br/>
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Others have also expressed the importance of a custody solution from a trusting source. According to investment expert Mike Novogratz, this is what would drive the next big increase in Bitcoin’s price:
<blockquote class="pullquote align-center">I think the next move up is going to need custody from a trusting source. It’s going to need a little more regulatory clarity. […] We wouldn’t take out $10,000 without those two things because that’s what brings the institutional investors in. But we’re going to get there. - Mike Novogratz
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<em>Images courtesy of Shutterstock</em>
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