Bakkt futures platform launch unknown, challenger BitAsset emerges strong
The development of Bakkt recently has drawn plenty of attention. Many believe that the positive signals sent by the physical-delivery futures of bitcoin may boost investor confidence and drive up the market.
Laomao, co-founder of INBlockchain, commented that “Bakkt has the potential to bring a super bullish market for bitcoin.”
Amid such expectation, however, Bakkt faces serious uncertainty as for when to launch the platform under the impact of the US regulation and government shutdown.
On the other side, challengers are coming.
According to Bloomberg, CoinFLEX, a British exchange, will join the circle of “physical bitcoin futures”.
Mark Lamb, the CEO, remarked that CoinFLEX plans to offer futures contracts for BTC, BCH and ETH. All the transactions will be based on physical delivery. The market is supported by a consortium of investors, including Roger Ver and Amber AI. CoinFLEX is partially owned by Coinfloor, the UK’s oldest exchange.
According to Bloomberg, what distinguishes CoinFLEX is physical delivery, which means when the contracts are due, the owners will reap cryptocurrency, not cash. This is a major difference from the current cash settlement in bitcoin futures. Some big exchanges also acknowledge that the cash settlement might be subject to manipulation.
In broader terms, CoinFLEX is just as much interested in getting a share of the cake of “Bakkt physical futures” as in targeting the entire cryptocurrency futures market.
Last month, insiders revealed that FAS of Japan is considering revising the Securities Law to allow the trading of cryptocurrency futures and options in mainstream financial exchanges, as opposed to its previous position that believed that these products are nothing but drivers of speculation.
The Japanese government is known for its strict regulation. There’s arguably nowhere that is free from the rule of law, even the gang group. While in countries and regions with easier policies, the trend is clearer.
HK SFC last November published the Statement on the Regulatory Framework for Virtual Asset Portfolios Managers, Fund Distributors and Trading Platform Operators, requiring issuers and distributors of virtual asset products to apply for license and put the virtual asset exchanges into the regulatory sandbox. It also requires that fund with over 10% of its AUM being virtual asset must sell to professional investors only. Any fund or brokerage that invests in virtual asset must register at the SFC.
CoinFLEX and BitMex are headquartered in Hong Kong. The latter, as a platform that only provides futures contracts, has more trading volume than any other exchanges, including the top exchanges such as Binance, Huobi, and Bitfinex.
Lamb is confident in the potential of futures market, adding that the daily trading volume of basic cryptocurrency is equivalent to that of derivatives, about three billion dollars. In other markets, futures trading might be 20 times that of spot, suggesting considerable scope for contracts related to digital assets.His point is proved by the actions of exchanges.
On November 21st, Huobi launched Huobi DM, a digital derivative; on December 17th, OKex, who used to provide fixed-term contract only, launched its permanent contract.
More emerging exchanges are joining the battle with a focus on futures trading.
Officially, BitAsset was established in December 2017 and headquartered in Hong Kong. Its networks are extended to Taiwan, South Korea and North America. The core team is composed of members from Chinese and foreign top investment banks, securities exchanges and base technology development agencies. It is a world-leading digital financial service platform that is committed to building a blockchain ecological cycle.
The futures contracts demo trading of BitAsset has been launched, while the live trading will be launched in the middle of this month. To address the problems with existing futures contracts, BitAsset has transformed the futures product from contract model, risk control design, trading speed, price mechanism and deposit and withdraw design, delivering an epoch-making 2.0 product.
Amid the uncertainties surrounding the Bakkt product and as the newcomer CoinFLEX is yet to establish itself in the battle field, the late comers such as BitAsset may well gain advantages in futures contracts with its specialty and professionalism. Let’s wait and see.