Intercontinental Exchange’s acquisition of the International Petroleum Exchange in 2001 led to one of the most important contracts ICE would ever offer — the ICE Brent Crude Oil Futures. This physically delivered contract has become the global benchmark for crude oil and trades over 1 million lots per day.
Over the years, ICE has launched hundreds of additional oil contracts across futures, options and swaps, many of which leverage the benchmark Brent Crude Oil Futures contract. These additional contracts have provided market participants with the price discovery and risk management necessary to serve the trading and hedging needs of producers, consumers, traders and institutions.
They’re using a similar playbook to expand their suite of products at Bakkt. By starting with the physically delivered Bakkt Bitcoin (USD) Monthly Futures, they have a benchmark contract that provides the foundation for them to develop complementary products based on the needs of the customers. As their benchmark bitcoin contract continues to set new trade volume and open interest records, they’ve now launched two new products that both leverage the benchmark contract:
- Bakkt Bitcoin (USD) Monthly Options: The first CFTC regulated option on futures contract for bitcoin, this contract is based on the benchmark Bakkt Bitcoin (USD) Monthly Futures contract and settles into the underlying futures contract two days prior to expiry on ICE Futures U.S. Price discovery occurs completely within a federally regulated market and has no exposure to unregulated bitcoin spot markets. The Bakkt Bitcoin Options offer important hedging, trading and income generating opportunities to market participants around the world.
- Bakkt Bitcoin (USD) Cash Settled Futures: This new cash settled futures contract available on ICE Futures Singapore, an Approved Exchange in Singapore that offers participants in Asia and abroad a convenient, capital efficient way to gain or hedge exposure to bitcoin. This contract leverages the settlement price of the benchmark Bakkt Bitcoin (USD) Monthly Futures and provides an alternative for participants who are unable to trade our physically delivered contract.
These new contracts represent an important milestone in the development of this emerging asset class and their bitcoin product complex. Backed by the strong support and commitment of the Intercontinental Exchange team, they have great momentum going into 2020 and an exciting product roadmap that includes new trading products, an expanded custody offering, an innovative consumer payments app, and more.