While the debate about Bitcoin’s viability as a currency rages on, announcements in the investment world may prove that progress is being made on that front.

Bakkt, a global ecosystem for digital assets, has released specific details for its pending Bitcoin futures market. The announcement is of particular importance — because the futures will be settled in ‘physical’ Bitcoin (BTC).

Two other Bitcoin futures markets are already active, but they are not physically settled. Both the CME and CBOE instituted options trading on the first and foremost cryptocurrency a year ago. However, both of these markets treat Bitcoin as a commodity by requiring traders to settle their trades in USD. Like gold, cotton, or other such commodities, the traders can place futures trades without actually owning the assets.

Hybrids are cool

The Bakkt platform will have trades physically settled in Bitcoin — a strategy that allows investors to gain exposure to the cryptocurrency through the trade while also profiting on risk-based on future value. This type of platform is a hybrid model between a customary commodities market and a foreign exchange transactional model. As such, bitcoins are treated as a currency.

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Bakkt is a partner of Intercontinental Exchange, Inc. (ICE) — which operates the New York Stock Exchange (NYSE) — and has been working with the Commodity Futures Trading Commission (CFTC) in order to gain regulatory approval and oversight. The CFTC has already approved the two previous futures markets. Most insiders believe that ICE’s ownership of the NYSE will lend credence to the proposal.

The potential for a market of this type is important for the financial world. It is no surprise to many that Bakkt’s own first-round funding raised a whopping $182.5 million from just 12 investors.

Centralizing Bitcoin

The announcement, however, also raised concerns that this type of institutional participation in cryptocurrency would only lead to greater levels of centralization. However, some of the fears may be unfounded. Unlike other assets that can become centralized in this way, Bitcoin is not tied to any centralized producer or government.

In spite of all the debate, one thing is certain — a market that requires physical settlement for futures trades in Bitcoin proves its validity as a currency. While many would argue that Bitcoin is only functionally viable as a store of value asset like gold, these events will certainly lend credence to the counterargument.

Think the Bakkt Futures market will take off and prove that Bitcoin is a currency? Let us know in the comments below!