Context and Insights On Bakkt and OKEX New Crypto Derivative Products

Bakkt launching option on physically settled bitcoin futures
OKEX will offer crypto-settled options
Speculation is Bakkt derivatives so far have not met volume expectations
Crytpo and Bitcoin Market Cap Story of Day

Crytpo and Bitcoin Market Cap Story of Day

CRYPTO MOVERS AND PRICES

 

 

CRYPTO STORY OF THE DAY

Another Busy Day For Derivative Roll-Outs Yesterday With Both Bakkt & OKEX Announcing New Products Intended To Launch Before The End Of The Year - We Provide Context & Insights

Bakkt announced two new products they intend to launch before the end of the year. First, an option on their physically settled bitcoin future. Second, the company apparently launched a cash-settled future in the Intercontinental Exchange's Singaporean branch that is said to be available to international traders with certain access. OKEX also announced that they would be offering crypto-settled options. Several media outlets incorrectly reported that they would be the only platform that allowed for writing of options. At least one other provider, Deribit, also allows for this practice.

Crypto Takeaway: Both announcements again do not really provide the market with new ways to get crypto exposure. The option products are both physically settled in BTC, something that has existed for years. Furthermore, Bakkt's cash-settled future mirrors that of the CME and for whatever reason was launched on ICE Singapore. That said, as we've previously mentioned, we think that cash-settled products generally fill more of an untapped market need than physically-settled. So, it's altogether possible that this new offering outdoes the performance of the earlier weekly and monthly BTC-settled contract. 

We also feel that the Bakkt announcement could be the last in a while for the company in terms of institutionally-focused products. The speculation is their derivatives so far have not met volume expectations and talk has shifted to their building consumer-focused applications. Furthermore, with the renewed uncertainty about Ether's regulatory status going forward, it's not exactly clear what crypto would fit into their model.

CRYPTO CHART OF THE DAY

Futures Volume - According to skew.com, OKEX surpassed BitMEX for the highest futures volumes in the last 24-hours. Note, OKEX has frequently been accused of being one of the worst contributors to 'wash trading' in the spot market...

 

About the Author

FRNT Financial is a technology and sales layer that offers institutional and accredited investors access to various forms of exposure to crypto-assets.