comex gold contracts are also "backed by physical gold" in name. but based on comex's gold vaults vs outstanding longs, it is physically impossible for that to be true. comex has enough assets on its books to cover longs, but not with physical gold.

in other words, comex gold contracts are indeed "fully collateralized" but they are not "fully collateralized with physical gold". you see the distinction, right?

this is how wall street operates and there are no regulations against it. why would bakkt operate differently than the other commodity markets, including those offered by its parent company (ICE)?


i can't speak for anyone else, but as i read it, you're omitting important context: "This is not an ETF: BTC are not held in trust with shares issued against them". i think the point was about whether contracts are fully collateralized by bitcoins ("issued against them"). a bitcoin ETF can't legally issue shares beyond the bitcoins held in its trust. that's not true for bakkt, comex, CME or anyone else offering "physically backed" futures contracts. i agree with that statement. in researching the gold markets, i've dug through enough CFTC reports to know.

when i read through bakkt's published releases, i notice their words have been chosen extremely carefully. is it "fully collateralized" or "fully collateralized by physical bitcoins"? we'll find out when their legal filings are made public.

for now, this is all speculation on both sides. but i see no reason to take their word for anything, especially when it flies in the face of common wall street practices. these guys aren't bitcoiners; it's the friggin ICE.