U.S. Stocks Reach New Highs; Bakkt Paves the Way for Next Bitcoin Bull Market

The Dow and broader U.S. stock market rose on Monday, buoyed by strong consumer spending data that seemed to allay concerns about slowing consumption in the world’s largest economy. Meanwhile, Intercontinental Exchange announced it has acquired a major cryptocurrency custodian for its Bakkt platform, opening the lid wide open on blockchain ambitions.

Stocks Extend Record Rally

Financials stocks led Wall Street’s major indexes to new highs at the start of the week. The benchmark S&P 500 Index of large-cap stocks rose 0.1% to close at 2,943.03. In addition to financials, communication services companies rose sharply.

The technology-focused Nasdaq Composite Index also reached a new peak, gaining 0.2% to 8,161.85.

The Dow Jones Industrial Average briefly traded above 26,600, where it came within 220 points of an all-time high. The blue-chip index would later pare gains to settle up 11.06 points, or less than 0.1%, at 26,554.39.

Consumer Spending Picks Up in March

Equity markets on Monday were well supported by data showing a broad pickup in consumer spending at the end of the first quarter, alleviating concerns that the U.S. economy was slowly losing its major catalyst.

Consumer spending rose just 0.1% in February before climbing 0.9% in March, the Department of Commerce reported Monday. Accelerated spending came despite a mere 0.1% increase in personal income.

The U.S. economy surprised to the upside in the first quarter, growing at an annual rate of 3.2%, the Commerce Department reported Friday in an advanced estimate. But despite the increase, consumer spending growth cooled considerably in the first three months of the year. Spending, which accounts for more than two-thirds of U.S. economic output, grew just 1.2% compared with 2.5% between October and December. Read more: U.S. Stocks Return to Record High in GDP-Inspired Rally.

Bakkt Gets Custody

Bakkt announced Monday it has acquired the Digital Asset Custody Corporation (DACC), spring-boarding the startup’s plans to develop a new crypto custody solution. The bitcoin futures platform also said it is working with BNY Mellon to store private keys and has already purchased $100 million in insurance for its cold storage services.

With the announcement, Intercontinental Exchange has more or less revealed that it plans to corner the blockchain ecosystem. This includes building out a platform that services retail and institutional investors, businesses and consumers. Despite not having a single customer, Bakkt has already raised $740 million from private investors.

Bakkt has been unable to launch on time because of regulatory constraints, but is trying to circumnavigate those by applying for a BitLicense in the state of New York. The company is also registering to become a trust company in the state, moves that will strengthen its appeal among institutional investors.

The cryptocurrency market was unaffected by the new, as bitcoin and its major altcoin peers fell. The total market cap of all coins reached $168.8 billion.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi