Bakkt Opens User Testing for Physically Settled Bitcoin Futures

Bakkt confirmed on July 22, 2019 that user acceptance testing was underway for its proposed daily and monthly bitcoin futures contracts at ICE Futures U.S. The tests represented an operational milestone for an Intercontinental Exchange-backed effort to connect bitcoin with established futures, clearing and custody infrastructure.

The distinction was important: July 22 marked testing, not public trading. ICE Futures U.S. had scheduled the exercise to determine whether clearing members and other participants could support the contracts and their customers. Bakkt said testing was proceeding with participants from around the world, but it did not disclose their identities, their number or any test results.

What entered testing

The two instruments were the Bakkt Bitcoin (USD) Monthly Futures contract and the Bakkt Bitcoin (USD) Daily Futures contract. Both were intended to trade on ICE Futures U.S. and clear through ICE Clear US.

ICE’s June 13 notice described each contract as one bitcoin, quoted in U.S. dollars and designed for physical delivery through the Bakkt Warehouse. “Physical” did not mean a tangible coin. It meant that fulfillment would involve transferring ownership of bitcoin between designated warehouse accounts rather than paying only a cash amount tied to a reference price.

The monthly contract could list as many as 12 consecutive contract months, while the daily contract could cover as many as 70 consecutive eligible contract dates. ICE specified a minimum price movement of $2.50 per bitcoin for ordinary trades, with $0.01 increments permitted for block trades. These were contract specifications, not records of production trading on July 22.

CFTC-filed exchange rules further described how long and short positions would generate delivery and receipt obligations. Clearing members would need arrangements permitting deposits, withdrawals and holdings at the Bakkt Warehouse. The warehouse would transfer bitcoin between the accounts designated by delivering and receiving members, while ICE Clear US handled the corresponding invoice payment.

Why the test mattered

Bitcoin futures were not new in the United States. CME and Cboe had introduced cash-settled products in December 2017. Bakkt’s proposed structure was institutionally significant because it combined an established futures exchange, a regulated clearinghouse and a custody system intended to support delivery of the underlying asset.

That design placed custody inside the product’s critical path. It also expanded the operational burden beyond matching trades: participants had to test clearing, reporting, account coordination and the movement of bitcoin associated with delivery. ICE characterized user acceptance testing as a critical step in preparing clearing members to support customers.

Bakkt argued that this infrastructure could improve institutional access and price discovery. That was a contemporaneous company claim, not an established result on July 22. No live-market volume, open interest, settlement price or liquidity measurement existed for these contracts because production trading had not started.

What remained unresolved on July 22

ICE had self-certified the exchange-rule amendments for the contracts in May 2019. Its June notice said no further CFTC action was required for those amendments, but it separately stated that trading remained subject to regulatory approval of the Bakkt Warehouse. The company therefore had not announced a firm production-trading date by July 22.

Public reporting also left the contents of the test only partly visible. Bakkt confirmed participation and the two contracts being tested, but did not publish a participant roster, completion criteria, failure reports or readiness assessment. The defensible conclusion for July 22 is consequently narrow: testing began as planned, while commercial launch and custody authorization remained pending.

Later context

In an August 16, 2019 announcement—not information available on July 22—Bakkt said New York regulators had approved Bakkt Trust Company and that production trading was scheduled for September 23, 2019. That later development confirms that the July exercise belonged to a pre-launch testing phase; it does not convert the July 22 tests into live trading.