Cryptocurrency startup Bakkt LLC, founded by New York Stock Exchange owner Intercontinental Exchange Inc., has started testing bitcoin futures in a move that may bring more institutional investment into the cryptocurrency market.

The new offering announced Monday comes with two contract options: a daily futures contract, which allows customers to transact in a same-day market, and a monthly bitcoin futures contract. The contracts will be listed and traded on the ICE Future U.S. Exchange as well as 12 global exchanges, including the NYSE.

Today kicks off user acceptance testing @ICE_Markets for the Bakkt Bitcoin Daily & Monthly Futures contracts

Testing is proceeding as planned with participants from around the world

— Bakkt (@Bakkt) July 22, 2019

During the testing period, each contract on the Bakkt’s platform will consist of one bitcoin with a minimum tick size for trading, or the minimum amount available on an exchange, set at $2.50 per bitcoin. The contracts are cleared through ICE Clear U.S.

The company said the futures contracts and other planned services, detailed when Bakkt raised $182.5 million in December, are designed to enable consumers and institutions to seamlessly buy, sell, store and spend digital assets. “Formed with the purpose of bringing trust, efficiency and commerce to digital assets, Bakkt seeks to develop open technology to connect existing market and merchant infrastructure to the blockchain,” the company said at the time.

While sounding great on paper, the road to regulatory approval has not been an easy one for Bakkt. The company had originally planned to launch bitcoin futures in early 2019 but struggled to obtain approval from the U.S. Commodity Futures Trading Commission.

The delayed arrival of the product, albeit initially in testing, is being welcomed by the cryptocurrency community, with some suggesting that it could be a decent boost for bitcoin.

“Bakkt begins testing on Monday,” a bitcoin enthusiast by the name of Rhythm on Twitter wrote. “The hype is bakkt with substance though. Unlike other futures exchanges, this is settled in bitcoin. Hard, actual bitcoin is paid out, not fiat equivalent to the price of bitcoin. The result is better price discovery and liquidity for bitcoin.”

Others were more gushing. Sam Doctor, a strategist at Fundstrat Global Advisors, wrote that “we think #Bakkt could be a huge catalyst for institutional participation in the #crypto market.”

Bakkt isn’t the first company to offer bitcoin futures and it probably won’t be the last. Cboe Global Markets started offering bitcoin futures in December 2017, followed by CME Group later the same month. Cboe subsequently ceased offering bitcoin futures in March because of a lack of demand.

Image: Bakkt