On Monday, cryptocurrency platform Bakkt Trust Company LLC announced that they will be launching a regulated options contract for those interested in crypto futures. This will become available on December 9.
While a December 9 date for the launch of the program is set, it is expected that the consumer app and merchant portal will be completely operational sometime within the first half of 2020. This is according to a blog post provided by the company.
In a statement, Bakkt Chief Product Officer Mike Blandina explained, “We’ll be launching a consumer app to make it easy for consumers to discover and unlock the value of digital assets, as well as ways in which they can transact or track them. Merchants gain access to a broader set of customers with expanded spending power.”
The options contract will be based upon the benchmark set by Bakkt Monthly Bitcoin Futures. The futures exchange will be supported by the owners of the New York Stock Exchange.
In addition to BTC, it is expected that additional types of digital assets will be available in the future. At least that is what Blandina has hinted. “A key feature of the model we’ve designed is to support a superset of digital assets, including cryptocurrencies as seamlessly as investors transact in stocks in a retail brokerage account,” he wrote. “Our vision is to provide a consumer platform for managing a digital asset portfolio, whether they wish to store, transact, trade or transfer their assets.”
These options are already available at some unregulated exchanges, similar to those offered by the Netherlands-based Deribit, but this will be the first time that such an option will be available in the largest exchange in the world. It is expected that offering it on the NYSE will greatly increase volumes in sales and liquidity in the crypto markets.
In an interview with Decrypt, Matt Hougan, the director of research at Bitwise Asset Management, said, “Options (obviously) allow investors and traders to do different things, and will facilitate new and important approaches to investing (covered call strategies, for instance).”
He added that the options contracts that will be offered at Bakkt are following the European-style model. This means that they can only be exercised on the date the contract expires. Explaining the reason behind this, Hougan said, “My guess is that they wanted to align the expiration of the options contracts with the expiration of their monthly futures.”
The first launch partner who will be testing the merchant portal will be Starbucks, sometime in the early 2020.
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