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INSTITUTION

Breaking Down Bakkt’s Upcoming Bitcoin Futures

Rocket Launch

Mark your calendar

Yesterday, Intercontinental Exchange (ICE), which is the parent company of the New York Stock Exchange (NYSE), announced that its new platform Bakkt will be launching Bitcoin futures trading on December 12th.

Previously, Bakkt was set to open up shop in November. Though there was no obvious reason given for the delay, ICE did note that the platform still has “pending regulatory approval.”

However, if all goes smoothly, expect to see yet another entry point for institutions to dip their toes in the crypto market.

What are Bitcoin futures?

To start, futures are defined as an agreement to buy or sell an asset at a specific future date for a specific price.

Add Bitcoin to the mix and futures are the same general idea, except that the price of the contracts is now based on Bitcoin’s price and investors can now speculate on what the price of Bitcoin will be in the future without actually owning Bitcoin.

In addition, futures contracts can help traders hedge, or minimize their risk, by lowering the price fluctuations in a portfolio that contains volatile assets like Bitcoin.

Bakkt’s futures getting physical

One of the most defining factors of Bakkt’s Bitcoin futures contracts is that it is “physically-settled” in Bitcoin.

Bakkt explains further that “each futures contract calls for delivery of one bitcoin held in the Bakkt Digital Asset Warehouse.”

This is contrary to the CBOE and CME Bitcoin futures that went live last year since both of those exchanges settle the contracts in cash.

Bakkt’s futures getting physical

Many believe that Bakkt’s launch on December 12th will help push Bitcoin up out of this bear market. That theory could hold some weight since last year, when CBOE launched its Bitcoin futures contracts, the price shot up 10% in one day.

According to research completed by the Federal Reserve Bank of San Francisco this summer, Bitcoin futures actually caused the price to both increase rapidly and decrease rapidly – a behavior that “typically accompanies the introduction of futures markets for an asset.”



ADOPTION

Visa Preparing to Launch Blockchain Digital Identity System Early Next Year

Visa embraces blockchain

Visa recently released a press release, announcing its plans to launch a “groundbreaking” digital identity product powered by blockchain technology. The product is set to launch in the first quarter of 2019 and will be referred to as Visa B2B Connect.

B2B Connect will tokenize a company’s sensitive information, such as banking details and account numbers. This will vastly improve the speed and security of cross-border business-to-business payments.

Kevin Phalen, global head of Visa Business Solutions commented on the new product saying:

“With B2B Connect, we’re developing a new way for businesses to make cross border, high value payments – fixing broken processes and breaking down geographic barriers along the way. B2B Connect will facilitate payments for financial institutions for a variety of industry verticals, including supply chain, trade, institutional banking and more.”
Teaming up with IBM

Visa is joining forces with IBM on this venture of launching B2B Connect. The two companies have a long history of working together on technological initiatives.

IBM is a market leader in blockchain solutions for enterprises. The company has put an intense focus on the technology and has already implemented blockchain systems for many companies.

IBM Blockchain Services’ general manager, Jason Kelley, spoke about the partnership:

“When industry leaders in payments and in financial services technology work together using open source technology, the entire business landscape stands to benefit. IBM Blockchain Platform and Hyperledger technology are delivering real business value today and B2B Connect is one of the most powerful examples to date of how blockchain is transforming payments.”
If you can’t beat them join them

Visa may be the company most threatened by blockchain. The company may be aware of this and is taking actions to prevent a disintermediation scenario from happening. If Visa implements blockchain in the appropriate areas of its business, it can furhter, its moat separating it from blockchain startups.



MINING

Bitmain Activates ‘Overt AsicBoost’ for its Miners

Secret revealed

A few days ago, the software development group, Slush Pool, revealed that Bitmain’s Antminer S9 supports AsicBoost but does not allow owners to activate the functionality.

AsicBoost is a technology that reduces the work required for miners to produce a hash. It can be implemented either covertly or overtly. The covert technology is controversial because it incentivizes minors to produce empty blocks.

Miners get over AsicBoost

Due to criticism by miners towards Bitmain, the company has enabled overt AsicBoost. Bitmain is now taking the stance that no one should have the exclusive right to AsicBoost.

It is good to see Bitmain, which has been a controversial company, listen to the crowd. This implementation is a good sign for the decentralization of Bitcoin.

The company that holds the patent to this technology has stated:

“We believe AsicBoost is such an important an innovative patent that, if licensed defensively, can become a force for good to protect decentralization in Bitcoin. At this point, it is clear that covert AsicBoost does not serve the interests of Bitcoin due to the negative incentives outlined, however, version-rolling AsicBoost has none of these drawbacks, and is additionally more efficient than covert merkle grinding.”



NEWS

Elon Musk Tweeted About Bitcoin and Crypto Community is Going Wild

“I love anime”

It all started Monday night when Tesla CEO Elon Musk tweeted a comment that read “I love anime.”

Shortly following, in the same thread, Musk tweeted “Wanna buy some bitcoin?” accompanied by an anime image focused on Bitcoin:

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Crypto community shows the love

Following Musk’s tweet centered around Bitcoin, whether it was a joke or not, the crypto community responded.

Changpeng Zhao (CZ), the founder and CEO of Binance, jumped at the opportunity and joked back:

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Others, however, took a more serious note and started drafting their own speculations to look for hidden meanings behind Musk’s tweet. Most popular was the idea that cryptocurrencies would be used as a payment system for Musk’s mars colonization dream.

Although the tweet may have had some hidden meaning behind it (besides mars colonization), it’s more likely that it’s just Elon being Elon.