On September 23, 2019, Bakkt—the cryptocurrency platform backed by Intercontinental Exchange (ICE)—officially launched its physically settled Bitcoin futures contracts, with the first trade executed at $10,115. This milestone marked the debut of the first U.S.-regulated Bitcoin futures product delivering actual BTC upon expiration.
The Rocky Road to Launch
Originally announced in August 2018, Bakkt faced three delays due to regulatory hurdles requiring:
- Trading (DCM)
- Clearing (DCO)
- Custody licenses
After securing a New York trust charter in August 2019, the platform finally overcame its "development hell" phase. Despite its $183 million funding from high-profile investors like Horizon Ventures (Li Ka-shing) and Galaxy Digital, the initial trading volume proved underwhelming.
Day One Performance: Reality Check
Key metrics from the launch:
- 2.5 hours post-launch: 8 BTC traded across 8 transactions
- By 5 PM ET: 28 BTC total volume
- Price impact: Bitcoin rose just 0.5% to ~$9,950
👉 Why institutional adoption takes time
Comparatively:
- CME's cash-settled futures debuted with $460M weekly volume
- Current CME averages ~$700M weekly
The Institutional Adoption Puzzle
Three potential barriers slowing uptake:
- Psychological Hurdles
Traditional investors still perceive crypto as lacking intrinsic value, creating low "mental liquidity" for portfolio allocation. - Infrastructure Lag
Su Zhu of Three Arrow Capital notes: "Many brokers weren't clearing-ready on day one—risk systems hadn't even integrated the asset class." - OTC Market Reality
DGroup's Zhao Dong observes: "Current demand represents fractional asset allocation by family offices, not tidal-wave institutional adoption."
The Bull Case: Why Bakkt Still Matters
Four structural advantages:
- Regulatory Moats
NYDFS-approved custody provides ETF applicants with the compliance blueprint SEC demands. - Physical Settlement
Eliminates "paper Bitcoin" manipulation seen in cash-settled products during 2018's bear market. - Asymmetric Incentives
Shorting requires holding BTC collateral—making sustained downward pressure economically irrational. - Network Effects
Competitors like ErisX now racing to replicate Bakkt's model, validating the approach.
FAQ: Addressing Key Concerns
Q: Does low volume mean Bakkt failed?
A: Early adopters often represent 1-2% of eventual demand. Traditional assets like gold ETFs took years to gain traction.
Q: Why aren't prices skyrocketing?
A: Markets discount known events. Bakkt's approval was priced in during August's 30% BTC rally.
Q: When might volume accelerate?
A: Watch for:
- Broker infrastructure completion (Q4 2019-Q1 2020)
- First quarterly contract expiration (December 2019)
- Competitor launches forcing adoption
👉 The real test begins at first expiry
Conclusion: Patience Over Hype
While Bakkt's debut lacked fireworks, its structural importance transcends daily volume metrics. The platform creates:
- Price discovery mechanisms for institutions
- Regulatory precedents for future products
- Technical infrastructure for broader adoption
As Three Arrow Capital's Zhu noted: "Adoption curves start as trickles before becoming floods." For long-term investors, Bakkt represents the beginning of crypto's institutional epoch—not its climax.