A few weeks ago, we talked about how Wall-Street was falling in love with Cryptocurrency, and how the Intercontinental Exchange (ICE), the owner of the NASDAQ, was set to launch a new institution-grade crypto platform known as Bakkt. We know cryptocurrency will be mass-adopted, and we believe Bakkt is a positive and bullish step forward. Cryptocurrencies attract investors of all skill and experience all over the world, but institutions did not participate in the market. Bakkt hopes to change all of this. The goal is simple: Financial institutions will be better equipped to delve into cryptocurrency.
The new platform, backed by several companies like Microsoft and Starbucks, will be specifically for institutional investors. It will offer a safe global environment for trading and investing in digital assets.
On 9/25/2018, the company announced the first product that it will offer to the market – physical Bitcoin Futures contracts against the US Dollar, Euro, or Pound Sterling. Users that purchase one Bitcoin will receive one Bitcoin on their accounts.
The information was released via Twitter using the official Bakkt twitter account – “Our first contracts will be physically delivered Bitcoin futures contracts versus fiat currencies, including USD, GBP and EUR. For example, buying one USD/BTC futures contract will result in daily delivery of one Bitcoin into the customer’s account.”
There are numerous institutions and companies that have tried to have a Bitcoin ETF approved – it’s currently hotly contested right now! The SEC most recently rejected the Winklevoss Twins’ proposed Bitcoin ETF.
With a Bitcoin ETF, investors that do not trust current crypto companies could invest in cryptocurrencies. However, experts believe that a Bitcoin/crypto ETF will be approved, given the interest and growing marketshare of this industry.
The Bakkt platform sounds very promising. New investors will place their funds on the market and help virtual currencies grow. But mass adoption might not happen soon. Institutional trading does not help increase the number of crypto users and adopteres.
Bakkt is trying to do something different. It uses a more reliable and traditional way for investors to delve into cryptocurrencies. This is done by using familiar and traditional tools that have been used by the industry before.
The reason why we’re bullish on this news is simple – if there are more investors in the market, then it might be possible for more companies to receive funds to start their blockchain projects and continue developing their products. This creates an economic incentive for both companies and investors to be successful. Companies that provide a good product will have investors waiting to invest in it.
Bakkt further explained that they want to continue to develop their platform, but their priority is supporting regulated institutions in serving their customers in this fast-growing asset class. This is crucial, as there is growing proof that there is a hunger for these products by retail investors, evidence shown by Fidelity Investments offering crypto products by the end of 2018.
With these new platforms, crypto-sceptics (such as Jamie Dimon) could re-think their strategy and diversify their offered portfolios by placing some funds in cryptocurrencies. Bakkt wants to be that facilitator.
The platform allows users not to worry about private keys, wallets, and exchanges. Everything is tailored for regular investors in traditional financial markets. This might be the first step towards making crypto more accessible and legitimize it in the financial industry. With this change could come innovation and a product that makes this widely useable for your everyday working individual.
Most importantly, Bakkt will offer an increased level of liquidity, allowing investors to have a stable market and increased investment options. There is currently no cryptocurrency exchange with the level of liquidity that Bakkt hopes to provide.
Blockchain is helping to shape a new era of investments. Traditional investors will have a platform that is reliable, professional, and will help bring traditional financial tools and mechanisms closer to the complicated and sometimes confusing crypto market.
What do you think? Is this a good first step forward? Do you think Bakkt will be successful? Let us know on our Facebook page!
