What is Bakkt? Preparing for the Physical Bitcoin Futures Market
As interest in the global cryptocurrency market grows, the need for a safe and efficient way to use digital assets grows with it. This article will focus on the Bakkt platform, which will allow institutional customers to perform various operations with digital assets as part of a seamless global network.
Investors and Team
The brains behind Bakkt is none other than Jeff Sprecher, head of Intercontinental Exchange (ICE), the world’s premier stock exchange operator. The project’s CEO will be Sprecher’s spouse, Kelly Loeffler, head of ICE’s digital assets department.
Behind the development of the project is Intercontinental Exchange itself – the operator of global stock exchanges and data services. Bakkt will cooperate with such giants in the field of emerging consumer fintech, like BCG, Starbucks, Microsoft. The main goal is to form an accessible ecosystem capable of supporting the growing needs of the digital assets market. Investors of Bakkt include Fortress Investment Group, Eagle Seven, Galaxy Digital, Horizons Ventures, Pantera Capital, Protocol Ventures, Susquehanna International Group, LLP, as well as British billionaire and hedge fund manager Alan Howard.
Bakkt is supposed to integrate institutional level markets with a custodian services system through trade and consumer applications. The first phase of the project will focus on trading and exchange transactions with Bitcoin and fiat currencies. The choice in favor of Bitcoin is explained by the fact that it still has the highest liquidity in the cryptocurrency market.
By combining consumer and institutional applications with a regulated infrastructure, project founders seek to ensure transparency and trust in digital asset markets. This will provide the project with a key role in increasing institutional, trade and consumer participation in the field of digital assets.
As part of the initial offer of Bakkt, ICE plans to release non-digital Bitcoin futures with custodian services in the first quarter of 2019, subject to review and approval of by the Commodity Futures Trading Commission (CFTC).
Future regulated trading platforms will establish new protocols to manage specific security requirements and transactions with digital assets. In addition, the clearinghouse will form a special guarantee fund, financing of which will be provided by Bakkt.
As Hacked previously reported, Bakkt was originally scheduled for launch by mid-December. The date has since been pushed back to Jan. 24, but this too may face a slight delay. Read more: Bitcoin Pulls Back from Three-Week Highs After Rapid Ascent; Bakkt Postponed Again?
This project is considered capable of engineering a global revolution in the field of digital assets and cryptocurrency technologies. This is provided by strong support from technological and financial giants mentioned above.
The main strengths of the project are identified below:
- Availability of sale, purchase and storage of digital assets to end users.
- Increase confidence, efficiency in the use of digital assets in commerce.
- Development of new open ideas for connecting the traditional market liquidity and trade infrastructure to blockchain technology.
- The company has been operating in the financial market since 2000 and is on the Fortune 500 and Fortune Future 50 list.
- Its wide range of services includes customer service in investment and trading in global financial markets through exchanges, clearing houses and information services.
- ICE Data Services is a leader in market data, providing the necessary information and connectivity to virtually any type of asset.
- ICE is the parent company of the New York Stock Exchange, which has helped many companies increase their capital more than any other exchange in the world, stimulating economic growth and transforming markets.
- Owns the world’s largest market for ETF Arca and the leading platform for mid-tier companies NYSE American.
- It is a leader in almost all categories of futures for “soft” agricultural products (sugar, coffee and cotton).
- ICE Futures Europe tops the list of global markets for the sale of Brent crude oil.
At the end of 2017, it received revenue of $ 4.6 billion.
- ICE’s powerful trading infrastructure can become a platform for the development of Bakkt, providing it with everything necessary for successful development.
- The project has enormous potential for ensuring wide recognition and use of digital assets, which in turn will have a positive effect on the overall capitalization of the digital assets market.
- The project is planned to be launched in early quater 2019 with the participation of the 12 largest world exchanges and a wide range of exchange instruments that will ensure the introduction of Bitcoin into the fiat market as a global digital currency.
The Bakkt project can provide a significant boost in the development of the digital asset market and the expansion of its use. In this regard, the year 2019 can be considered as the year of the merger of two segments of the financial world on a global scale – the fiat market and the sphere of digital assets.
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.