Bakkt Chief Operating Officer Adam White has caused controversy by stating during the CoinDesk Invest: NYC conference that the company intends to offer cash-settled Bitcoin futures, undermining Bakkt’s initial principle which was to offer physically-backed Bitcoin futures. The news has led to those who link Bitcoin futures to manipulation to decry the move, stating that it will just increase the paper supply of Bitcoin and will not benefit the overall market.
Cash-settled Futures Could Arrive This Year
White was quoted at the conference as saying that “We (Bakkt) have the intention of offering a cash-settled contract as well”, apparently in response to customer demand, with clearing conducted through ICE Clear Singapore and traded on ICE Futures Singapore. Bakkt is currently in discussions with Monetary Authority of Singapore (MAS), who incidentally this week signed a deal with JPMorgan for blockchain-based money transfer service, and as a result hope to launch the service as soon as this year. The development comes in the wake of Bakkt announcing its intention to expand its custody services to all institutional clients from only those who trade futures on ICE.
Please no Cash setteld Futures for BTC. .. that would be horrible again. .. we need real physical BTC futures!!!! The other thing is pure manipulation of the prize discovery and should be illegal!!!! Shame on the CME. .. hope Bakkt will be True to they NAME AND REPUTATION!!!
— Crypto_Goku (@EssjSongoku) November 13, 2019
“Permanent Milking Cow for Wall Street”
The move from physically-settled into cash-settled futures, such as those offered by CME, has not gone down well with some in the community. Twitter user SuperCrypto, who said in an exclusive interview with BitStars News that he believes the Bitcoin futures market exists only to “tame” the cryptocurrency and get it into the hands of Wall Street, told BitStarz News that Bakkt’s aim was to “increase paper supply of Bitcoin so there is less interest in Bitcoin itself”, adding that the Bakkt’s move into cash-settled contracts would further allow Bitcoin to be a “permanent milking cow for Wall Street.” Whether this comes to pass we don’t yet know, but it is easy to see how Bakkt’s move can be seen as underhand after selling the product on the hype of it being physically-backed.