“Nothing Else Comes Close to What Bakkt will mean for Bitcoin”, According to Hedge Fund Manager
While much of the crypto world is obsessed with ETFs, crypto-startup Bakkt is preparing to steal the spotlight. According to a recent report online, Bakkt could be the biggest news to hit the crypto community in history.
Despite its game-changing potential, Bakkt hasn’t received nearly the coverage or hype it deserves. News about Bakkt over this summer has been drowned out by ETF rejections and slumping bitcoin prices.
Attitudes are starting to change, however, and members of the crypto community are starting to realize just how important Bakkt could be for the world of bitcoin.
A new report at The ICO Journal highlights how important Bakkt could be for bitcoin and crypto:
“Nothing else on the horizon comes close to what Bakkt will mean for bitcoin,” explains an unnamed crypto hedge fund manager in a statement to The ICO Journal.
Bakkt, for those out of the loop, is a startup that launched earlier this summer. Calling Bakkt just another “startup”, however, is a bit misleading: Bakkt is owned by Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange. Bakkt has also partnered with Starbucks, Microsoft, and other major American corporations. Now, Bakkt wants to create the world’s best institutional on-ramp for crypto investing.
Fortress, Susquehanna, and Eagle Seven are also supporting Bakkt.
Here’s how Forbes explains Bakkt’s services, which are scheduled to launch in November:
“Bakkt plans to offer a full package combining a major CFTC-regulated exchange with CFTC-regulated clearing and custody, pending the approval from the commission and other regulators. Bakkt will provide access to a new Bitcoin trading platform on the ICE Futures U.S. exchange. And it will also offer full warehousing services, a business that ICE doesn’t have.”
Today, a number of major financial institutions have money on the sidelines of the crypto industry. They want to participate, but they don’t have the means to do so safely. Hedge funds can’t just throw money into risky assets with insecure custody services, for example. They need to participate in industries in a regulated and secure way. Bakkt aims to be that on-ramp to the crypto industry.
Bakkt plans to earn revenue from two sources, including trading fees on the ICE futures US exchange as well as warehouse fees paid by customers that buy bitcoin and store bitcoin with Bakkt.
For all of these reasons, The ICO Journal isn’t being dramatic when it says things like:
“This is the biggest and most important initiative since bitcoin was born. Period.”
It Could Cause Trillions of Dollars to Pour Into Crypto
Optimists will tell you that trillions of dollars are waiting on the sidelines to pour into the crypto industry. They’ll claim that institutional investors, hedge funds, and high net worth individuals are waiting for a secure way to participate.
Bakkt could present the perfect opportunity, paving the way for trillions of dollars to pour into crypto.
Hedge funds could buy bitcoin and store it with Bakkt without developing their own native storage protocols. This storage is regulated and secure.
The source mentioned in The ICO Journal report emphasizes the importance of ICE getting involved:
“The depth and breadth of the ICE (Intercontinental Exchange) network and exchange ecosystem means that adoption/trading volumes will skyrocket overnight. The same pipes and structures that allow Goldman, JPMorgan, Morgan Stanley, among a horde of others, to trade billions in commodities like gold, silver, soybeans, and corn; will be the same architecture used to trade Bitcoin.”
In other words, these are the same systems that the world’s biggest financial institutions use to invest in traditional markets. Now, in November, these same institutions will have a similar system they can use to access crypto. That’s huge.
Bakkt Has “Solved the Final Issue”
That same source from The ICO Journal report explains that Bakkt has “solved the final issue” that has prevented institutions from participating in crypto:
“Think of it this way…with the custody and ‘warehouse facility’ solved inside of Bakkt’s infrastructure you have solved the final issue that institutions have been clamoring for in the digital asset space.”
Bakkt makes bitcoin transactions safe via the warehouse system. Institutions can claim their bitcoin at any time and trust that those bitcoins are stored in a legitimate, regulated facility backed by trusted names.
“The Ramp Up and Volume Will Be Enormous and Lightning Fast”
The name “Bakkt” doesn’t get ordinary people interested in crypto today. You can see headlines across the internet extoling the virtues of Bakkt, but most people aren’t paying attention. There isn’t the same level of brand-name recognition.
“While it would be interesting if Bakkt got the press it deserved, there really isn’t a single ‘name’ banking institution that could accompany them in a headline,” explains the hedge fund manager interviewed by The ICO Journal.
“And that is precisely the scale of the Bakkt story. The ramp up and volume with be enormous and lightning fast. Within months you will have billions of dollars in institutional cash running through Bakkt’s system, buying and selling Bitcoin.”
These institutions will be buying crypto from the market, and that could mean dramatic price surges before the end of the year – assuming institutions still want to buy bitcoin after months of slumping markets.
Ultimately, all of the investment banks are huge clients of ICE and the New York Stock Exchange. They use these platforms to make billions of dollars’ worth of transactions every day. One of the reasons they have avoided crypto, so far, is because of the lack of an effective custody solution. Bakkt believes it has solved that problem – and they have the institutional support to prove it.
Bakkt’s core service is scheduled to launch in November. Just like bitcoin ETF approval, Bakkt’s launch could set off a record-setting bull market run.