The cryptocurrency industry took a significant step toward mainstream institutional adoption on August 29, 2019, as Bakkt — the digital asset platform backed by the Intercontinental Exchange (ICE) — announced it would begin accepting Bitcoin deposits for custody on September 6. The move sets the stage for the long-anticipated launch of physically delivered Bitcoin futures contracts on September 23.
TL;DR
- Bakkt will open its Bitcoin custody warehouse on September 6, 2019
- Physically delivered Bitcoin Daily and Monthly Futures launch September 23
- Bakkt Trust Company LLC approved by New York Department of Financial Services as qualified custodian
- Contracts will be traded on ICE Futures U.S. and cleared through ICE Clear U.S.
- Both venues are federally regulated by the CFTC
Bakkt’s Custody Warehouse Opens Its Doors
In a widely noticed announcement on Wednesday, August 28, Bakkt revealed the timeline for its custody solution, which has been one of the most closely watched developments in the crypto industry throughout 2019. The company tweeted that its warehouse would begin offering secure storage of customer Bitcoin starting September 6, directly preparing for the launch of Bakkt Bitcoin Daily and Monthly Futures on September 23.
The announcement marks a crucial milestone for Bakkt, which has been working through regulatory approvals for over a year. The platform’s futures contracts will enable physical delivery of Bitcoin — a feature that distinguishes them from the cash-settled Bitcoin futures already trading on the CME. According to Bakkt, the contracts will operate with end-to-end regulated markets and custody.
Institutional-Grade Infrastructure Takes Shape
Bakkt’s Bitcoin futures will be exchange-traded on ICE Futures U.S. and cleared through ICE Clear U.S., both of which operate under federal regulation by the U.S. Commodity Futures Trading Commission (CFTC). This dual-layer of regulatory oversight addresses one of the key concerns that has kept institutional investors on the sidelines of the crypto market.
For custody purposes, Bakkt secured approval from the New York Department of Financial Services to establish Bakkt Trust Company LLC, a qualified custodian that will oversee the Bakkt Warehouse. This regulatory green light from New York’s financial watchdog adds another layer of credibility to the platform’s infrastructure.
Bridging the Institutional Gap
Bakkt CEO Kelly Loeffler emphasized that the platform is designed to address the specific needs of institutional participants, who have been underserved by existing crypto market infrastructure. In her statement, Loeffler noted that digital asset markets have become global and well-developed but have largely been designed for retail customers rather than institutional players.
“Whether concerns relate to a lack of liquidity, market quality and regulation, or issues with reliability, fees, and operational risks, we are addressing these challenges with a transparent offering,” Loeffler stated. The platform aims to provide what Loeffler described as “unprecedented regulatory clarity and security” alongside a regulated, globally accessible exchange.
Market Context
The Bakkt announcement came at a time when Bitcoin was trading around $9,510, down roughly 2.4% over 24 hours and approximately 4.8% for the month of August, according to data from CoinMarketCap. Despite the short-term price weakness, the broader narrative of institutional infrastructure development continued to progress, with Bakkt’s launch representing one of the most significant milestones in that journey.
Ethereum was trading at $169.52, while the total cryptocurrency market capitalization stood at approximately $261 billion. The top five cryptocurrencies by market cap — Bitcoin, Ethereum, XRP, Bitcoin Cash, and Litecoin — were all posting losses for the day, reflecting the broader market correction underway during late August 2019.
Why This Matters
Bakkt’s physically delivered Bitcoin futures represented a paradigm shift in how institutional investors could gain exposure to Bitcoin. Unlike cash-settled alternatives, physical delivery means actual Bitcoin changes hands, creating direct demand for the underlying asset. The ICE backing, CFTC regulation, and New York-approved custody solution combined to create an institutional-grade on-ramp that had never existed before in the cryptocurrency market. The September 2019 launch would eventually prove to be one of the foundational building blocks for the institutional Bitcoin adoption wave that accelerated in subsequent years.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always do your own research before making investment decisions.
september 6 custody opening, september 23 futures launch. Bakkt really tried to build the full institutional pipeline
building custody first then futures on top was the right call. institutions needed the infrastructure before they could trade
exactly. cant trade futures if you cant store the collateral. bakkt got the order right even if the volume never matched the hype
NYDFS qualified custodian status was the real milestone here. not just another unregulated exchange pretending to be legit
ICE Futures US plus CFTC oversight. this was the most regulated crypto product in the US at the time by far
CFTC oversight was the differentiator. every other crypto futures product at the time was either offshore or cash-settled
Tomasz W. CFTC oversight was the differentiator but it didnt matter. CME launched cash settled futures and stole all the volume. Bakkt had the right idea wrong execution
warehouse_ghost_ CME stole the volume because their product was simpler. institutions dont want physical delivery, they want a hedge they can roll quarterly without thinking about custody logistics
Lieselotte A. institutions wanting cash settled was obvious in hindsight. physically delivered BTC required custody infrastructure most desks didnt have in 2019. Bakkt solved a problem nobody had
NYDFS approval was the real signal. not many crypto custodians had that level of regulatory backing in 2019
physically delivered BTC futures in 2019 was genuinely innovative. shame the volume never showed up
physically delivered futures in 2019 was genuinely ahead of its time. problem was nobody wanted physical delivery, they wanted BTC price exposure without touching BTC
physically delivered futures were supposed to be the institutional on-ramp. instead Bakkt opened to crickets and CME cash-settled ate the whole market
borscht_maxi_ ICE spent millions building regulated custody infrastructure that nobody used in 2019. fast forward to 2024 and every institution wants exactly that. just 5 years too early
NYDFS approval as qualified custodian was the real milestone here. Bakkt Trust Company became the template that every crypto custodian since has tried to copy
bakkt warehouse opening in september 2019 feels like ancient history now. they built the infrastructure but CME ended up eating their lunch on volume
mev_sensei Bakkt built the rails and then CME ate their lunch. physically delivered BTC futures sounded great but institutions wanted cash settled
physically delivered BTC futures sounded great in theory but institutions wanted cash settled. CME volume crushed Bakkt from day one
futures_guy CME won because cash settlement is easier to clear. Bakkt built the harder product that nobody actually wanted
ice_veteran_ CME won because cash settlement is easy. physically delivered BTC required actual custody infrastructure and institutions didnt want the hassle. Bakkt built the wrong product
Bakkt was supposed to be the institutional gateway and instead became a case study in building infrastructure nobody asked for
Hannah W. harsh but accurate. Bakkt spent millions building NYDFS custody and CME just took the entire futures market with cash settlement
Hannah W. harsh but accurate. Bakkt spent millions on NYDFS custody and CME took the whole market with cash settled products that were easier to use
physically delivered BTC futures in 2019 was ahead of its time. institutions wanted cash settled because they didnt want to handle custody. Bakkt built the wrong product
Bakkt spent months getting NYDFS approval while BitMEX was doing 1x-100x leverage with zero KYC. same market, two completely different bets on who the customer was
crate_of_sats BitMEX doing 100x with zero KYC vs Bakkt spending months on NYDFS approval. same market completely different bets on who the customer actually was
ICE Futures US and CFTC oversight sounded great on paper. CME just launched cash settled and took the entire market. Bakkt built the harder product that nobody wanted to use