As the launch options on Bitcoin from Bakkt impact on the cryptocurrency market?

Representatives Bakkt announced the launch of Bitcoinoptions within the trading platform, scheduled for 9 December 2019. Options on the main crypto-currency is already traded on the stock exchange Deribit, which is outside the jurisdiction of the United States of America. It is expected that the new product from Bakkt will cause rapid development of the stock market.


A bit of theory. Option — a contract under which a buyer obtains the right but not the obligation to buy or sell a certain asset. To do this it needs on a pre-specified price at a future point in time or during a selected time interval. Options are a type of derivative financial instruments or derivatives.

Options are of two types: American and European. American can be redeemed any day before the expiry of the option. The European option will be only redeemable at a specified date.

Options for cash

That’s what the journalists Decrypt said head of research at Bitwise Asset Management Matt Hogan.

Options (obviously) allow investors and traders to do different things and facilitate new and important approaches to investing.

On Bakkt will introduce the options of the European type, so that they can be redeemed only on a specific day.

I think they want to combine the expiration of option contracts in accordance with the expiration of monthly futures.

In an industry that almost daily balances between scandal and celebration, Bakkt has become a tool for serious investments in Bitcoin. The recent announcement of the exchange means that less than four months, it launched two investment products.

Source: Forbes

Due to the high volatility of cryptocurrency is to become a perfect tool for options and other derivatives. Miners can use them to mitigate market risks due to possible decline in rates.

This way, they guarantee themselves the availability of funds for payment of electricity and rental of the farms, even in the case of serious sagging of the value of the cryptocurrency.

At the same time, traders can profit from the constant price fluctuations. It is not surprising that the derivatives market in kriptonyte has the potential to seriously around spot bargains. We are talking about transactions, payment for which is made immediately. That is the opposite of futures and options.

Related article: Cryptocurrency derivatives: how they work and what is needed?

Source: Coincentral

According to the analytical services Skew.com and BitcoinTradeVolume.com, daily trading volume of derivatives on Bitcoin reach ten billion dollars. However, they are often more trading volume in the ordinary transactions with the cryptocurrency almost ten times.

It is noteworthy that more than 72 percent of these volumes occur on exchanges, which are outside the jurisdiction of the United States of America. For example, among them include Hong Kong and Japanese stock exchange BitMEX trading platform Bitflyer.

In derivatives there is a demand, as the statistics show, it is pretty big. Bakkt will give the opportunity for American investors to join the race. All this will give more liquidity to the cryptocurrency and will significantly increase its popularity among institutional investors. Hogan warns that To not happen overnight. Volumes will rise long enough, but it’s definitely worth it.

The news sounds good. The only concern arises because of the possibility to manipulate the cryptocurrency market on the example of the situation in futures. Recall that in the December 2017 futures Bitcoin launched, and with the filing of the administration of the President of the United States. Due to this growing bubble first cryptocurrency was stopped. We wrote about this situation in a separate article.

The situation on the market follow our cryptodata millionaires. Even more interesting, you can find us in Yandex the Zen.

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