The following is news from September and October:
Bakkt Offers Physically-Settled Bitcoin Futures
Up to this point, all Bitcoin futures have been ‘cash-settled’, meaning that the seller of the future delivered cash at the settlement date, and no bitcoin was ever transferred. And while those futures are still popular, Bakkt is offering an alternative that will impact the crypto asset’s spot market: physically-settled futures. With these futures, the contract will be settled by the seller sending an agreed amount of bitcoin to the buyer, requiring them to either already hold bitcoin or enter the market and buy some in order to settle. If their product catches on or is replicated by larger vendors, there should be a significant rise in trading volume as more bitcoin changes hands.
CME to Launch Bitcoin Options
Starting in early 2020, CME will join the small list of exchanges on which investors can trade Bitcoin options. Unlike other options currently available, the CME options will be attached to CME’s already-existing Bitcoin Futures, so exercised options will be settled with the transaction of the futures rather than physical bitcoin. At that point, the user will have the option to trade those futures or hold them until the contract’s expiration date and receive the appropriate amount of cash. However, it is expected that most options will have the same expiration date as the futures contracts and so the options will essentially settle in cash on that same day.
At the moment, option sizes will be the same as futures contracts (5 BTC per contract). However, CME does not expect to launch the products until early 2020 and changes may be made leading up to that.
Bakkt Also Picks up Starbucks for its Consumer Spending App
There were rumors leading up to this, but Starbucks has finally announced it is partnering with Bakkt on the new Bakkt consumer spending app. The application will allow users to store various crypto assets and use them to purchase items from Starbucks and any other merchant that signs on with Bakkt. Between this application and the recently-launched futures market, Bakkt is making big waves in the crypto space and helping give Bitcoin its best chance yet at mass adoption.
Charles Schwab Eliminates Commissions, More Follow
Last month, Charles Schwab made waves in the online broker world by announcing it would eliminate stock and ETF commissions, seemingly to compete with disruptors like Robinhood and Interactive Brokers’ new commission-free IKBR Lite service. While Schwab shares fell 10% following the news, competitors’ stock tumbled even more – TD Ameritrade stock was down 25% at one point, but they were quick to announce that they too would offer free trades. E-Trade was the last to follow, but ultimately removed commissions as well. While each stock has somewhat recovered, none have totally recouped losses as investors adjust to them losing a fairly stable source of revenue.
Libra Loses Sponsors (A lot)
A number of Libra sponsors have recently backed out and severed ties with Facebooks’s Libra project. The tech conglomerate has now lost the participation of Mastercard, PayPal, Visa, Stripe, and eBay and a few others. While the majority of sponsors remain, the loss of payment networks like Mastercard and Visa is a big blow to both Libra’s reputation and growth.
The future of the ambitious Facebook project is in limbo, as Libra has continually received sharp criticism from legislators. Zuckerberg testified before Congress this week, answering a broad range of questions from ad policy to Libra payment server security. It remains to be seen when lawmakers will come to a decision regarding the fate of Libra.
Xi Jinping Talks Blockchain
Bitcoin’s price rose 30% this past weekend, thanks to a (rare) boost from Chinese government. The Chinese Premier Xi Jinping gave a speech to the communist party committee embracing blockchain and encouraged the country to “seize the opportunity” and continue developing the technology.
China has historically held a tough stance on cryptocurrencies. Initial coin offerings (ICOs) have been banned since 2017. However, the country has been working on applying the fundamentals of blockchain to create their own sovereign cryptocurrency since 2014.