Great News - Bakkt Opens Bitcoin Warehouse

Intercontinental Exchange (ICE)-backed cryptocurrency exchange, Bakkt, that is making the community excited, has some great news. Bakkt has finally opened its warehouse storage facility for Bitcoin deposits and withdrawals from customers as it prepares ahead for the full launch of its Bitcoin Futures on September 23.

In late August, Altcoin Buzz reported that Bakkt is gearing up for the launch of its own custody service and it turned out to be true. This was confirmed in a tweet today by Bakkt.

Bakkt CEO Kelly Loeffler explained the working of Bakkt Warehouse. She wrote:

“The Bakkt Warehouse, which is part of Bakkt Trust Company, is built using the cyber and physical security protections that support the world’s most actively traded markets, including the NYSE. In addition, the independent governance and compliance requirements of a qualified custodian mean that the Bakkt Warehouse is designed to meet the highest standards of oversight.”

It appears that the platform has already been met with great success, as recent data shows that some of the largest Bitcoin investors have already initiated transfers into Bakkt’s wallets, which may suggest that the platform will be met with massive utilization upon its launch on September 23rd.

How will it all work?

*Futures are set to begin trading 23rd September and actual Bitcoin can be acquired by going long in the one-day or 30-day contract and holding to delivery.

*Custody of the coins will be handled by Bakkt Trust Co., which received approval from the New York State Department of Financial Services last month to hold customer tokens.

*The warehouse will then move Bitcoins from short positions to long positions at expiration, resulting in actual delivery of Bitcoin.

*The warehouse has opened early to allow customers to move Bitcoin in and out of their accounts to become comfortable with the process prior to Sept. 23.

The Future of Physically Delivered Bitcoin

A physically-delivered Bitcoin futures contract is a type of a contract where customers are given the actual cryptocurrency instead of a cash payment once the contract expires.

The fact that Bitcoin futures are physically settled on Bakkt, means that the party will receive delivery of a Bitcoin from Bakkt Warehouse when the contract expires. In contrast, futures contracts at the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange are cash-settled and based off the price of Bitcoin at cryptocurrency exchanges.

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Satya
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