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  • Mon, Aug 6, 2018 New York Stock Exchange's ICE launches cash-settled bitcoin futures


    The New York Stock Exchange parent company Intercontinental Exchange (ICE) announced on Friday that it plans to launch cash-settled bitcoin futures in November this year, before the approval of the Commodity Futures Trading Commission (CFTC). ICE said it will launch a new company called Bakkt, which will offer a one-day physical bitcoin futures transaction. The company was formed in partnership with Microsoft, Starbucks and the Boston Consulting Group (BCG). It is unclear how much money Bakkt has raised, but ICE and Microsoft have invested in the company and expect more investors, including Fortress Investment Group, Eagle Seven, Galaxy Digital, Horizons Ventures, Alan Howard, Pantera Capital, Protocol. Ventures and LLP.

    Bakkt CEO Kelly Loeffler said: "Bakkt aims to provide a scalable entry point for organizations, businesses and consumers to participate in digital assets by improving efficiency, security and usability." Then added: “We are working together to create an open platform to help unlock the potential for digital assets to transform in the global marketplace and in the business world.” This statement was subsequently advertised, including what CNBC called “the biggest news of the year”. The current traditional framework actually allows for the sale of bitcoins, while the increased futures appear to operate only under the supervision of the CFTC. A one-day future is certainly not a futures, it is a spot transaction. However, individuals are not directly involved in such transactions.

    The design first had Bakkt, which provided a platform for buying and selling, clearing funds from the buyer to the seller, and storing the “depot” of Bitcoin and sending it to the buyer. Then, those who can actually do this business are called brokers. Institutions buy and sell through these intermediaries, and finally buy from these intermediaries. The role of Starbucks here is still unclear. Some people report that they will start accepting bitcoin payments, and a Starbucks spokesperson told them, “Customers will not be able to pay for coffee in bitcoin.” Starbucks vice president Maria Smith said in a press release Such an interesting and ambiguous view is Starbucks' partnership and payment method. "As a flagship retailer, Starbucks will play a key role in developing practical, trusted and regulated applications for consumers, converting their digital assets into dollars for use by Starbucks.

    As a leader in mobile payments, Starbucks rewards more than 15 million members, and Starbucks is committed to innovation and expanding payment options for our customers. “The confusion here is whether Starbucks immediately converts Bitcoin into US dollars, or whether Starbucks is just a company, just allowing Bakkt customers to convert Bitcoin into legal tender before they are used in Starbucks. In Fortune magazine A lengthy and somewhat cluttered article clarifies this confusion. The article claims that they spent hours talking to the CEO of ICE, but it looks like Starbucks has begun to enter this space.

    Recently, Starbucks stocks have fallen sharply, so they may consider opening up new markets, and ICE is also. The infrastructure that the latter is building is useful to institutional investors, but whether they can actually get bitcoin or just create a CFTC tag can be confusing. It is unclear what their experience in protecting cryptocurrencies, and whether they realize that decentralizing power is not only a good thing, but also equally important in terms of security. However, companies like Bakkt already have competition, and there is likely to be more competition in the US and abroad, but this statement does indicate that many companies on Wall Street are entering the cryptocurrency sector.