The launch of Bakkt Warehouse comes as the company prepares to roll out its platform for Bitcoin daily and monthly futures in the United States on Sept. 23. The platform will enable two types of physically-delivered Bitcoin futures with end-to-end regulated markets and custody, as previously reported.
Bakkt Warehouse, a qualified custodian of crypto trading platform Bakkt, is now accepting customer Bitcoin (BTC) deposits and withdrawals.
First physical BTC futures on the way
As the company tweeted on Sept. 6, Bakkt Warehouse has officially launched in accordance with the plans revealed on Aug. 28.
According to a Bloomberg report, Bakkt will be the first platform to offer physically-delivered Bitcoin futures if launched successfully. In contrast to the existing cash-settled Bitcoin futures offered by the Chicago Mercantile Exchange and the Chicago Board Options Exchange, Bakkt’s physically-settled futures will enable clients to receive payment in Bitcoin once the futures contract expires.
Once launched, trades will take place on the futures platform run by Bakkt’s parent company, the Intercontinental Exchange (ICE), while clearing will be settled through ICE Clear.
Meanwhile, custody will be operated by Bakkt Trust Company, which reportedly received a charter from the New York State Department of Financial Services to hold clients’ crypto funds in August 2019. In turn, Bakkt Warehouse will be moving Bitcoin from short positions to long positions at expiration, which will lead to the actual delivery of Bitcoin.
At press time, Bitcoin is nearling the $11,000 mark and is trading at $10,883, up 3.09% on the day, according to data from Coin360.
Trump’s Trade War May Be Driving Chinese Investors to Bitcoin
As the Chinese yuan falls in value due to factors like the ongoing trade war with the U.S., there are signs that locals are increasingly moving funds into bitcoin.
According to a Bloomberg analysis of prices over 30 days, the negative correlation between the yuan and bitcoin has fallen to a record low in the last seven days.
While previously the Chinese government has sought to keep the value of its national currency above 7 CNY to the dollar, last month the yuan was allowed to slide below that level, dropping to its lowest for 10 years. The move was reportedly in response to U.S. President Donald Trumps threats in early August to impose a 10 percent tariff on Chinese imports.
That the drop in yuan value is causing a flight by Chinese investors is backed up by exchange data. Bloomberg spoke to Dr. Garrick Hileman, research director at Blockchain and CoinDesk contributor, who said that bitcoin prices on exchanges such as Huobi that cater more to Chinese traders are trading at a premium.
The inverse correlation between bitcoin and the yuan also notched up in April and May “as the tensions ratcheted up with the deterioration on U.S.-China trade relations”, Hileman said.
The report comes as new details emerge on China’s own national digital currency. The recently appointed chief of the digital currency division of the People’s Bank of China has said the upcoming digital yuan will have features not offered by Facebook Libra.