What Does the Bakkt Exchange Mean For Cryptocurrency Investors?
Cryptocurrencies have attracted the attention of several investors all over the world. But in general, institutions did not participate in the market. Back in August, the Intercontinental Exchange (ICE), which operates an important number of regulated exchanges all over the world, announced its intention to launch a new institutional-grade crypto platform known as Bakkt.
The new platform, backed by several companies such as Microsoft and Starbucks, will be specifically designed for institutional investors. It will be offering a safe global environment for trading and investment in digital assets.
On September 25, the company announced the first product that it is going to release to release to the market. Investors will be able to invest in 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 has been released via Twitter using the official Bakkt 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.
— Bakkt (@Bakkt) September 25, 2018
There are different institutions and companies that have tried to have a Bitcoin ETF approved. For example, the Winklevoss twins presented several times their plans for a Bitcoin ETF but the U.S. Securities and Exchange Commission did not accept the proposals as of yet.
With a Bitcoin ETF, investors that do not trust current crypto companies could have invested in cryptocurrencies for the first time. However, experts believe that sooner or later a Bitcoin and crypto ETF would be approved.
The Bakkt platform is very promising. New investors could start to place their funds on the market and help virtual currencies to grow. However, there are no reasons to think that mainstream adoption is going to happen soon. Institutions would not help increase the number of crypto users.
Bakkt is a different company that uses a different strategy to capture investors. It uses a more reliable and traditional way for users to invest in cryptocurrencies. This is done by using traditional financial tools that have been used several times in the industry before.
If there are more investors in the market, then, it is possible that more companies will receive funds to start their projects and continue developing products. That creates an economic incentive for both companies and investors. Companies provide good products and services and investors place their funds in the market.
Bakkt explains that they continue to develop their platform but they focus on supporting regulated institutions in serving customers in this emerging asset class. At the same time, the involvement of new players such as enterprises legitimizes the market. It confirms that there is a real interest from both retail and institutional investors on these assets.
And indeed, with these new platforms, crypto-sceptics could re-think their strategy and diversify their portfolios by placing some funds in cryptocurrencies. Bakkt will be offering this possibility to those wealthy investors interested in crypto assets.
The platform allows users not to worry about how to manage private keys or how to deal with crypto wallets and exchanges. Everything is tailored for regular investors in traditional financial markets. With Bakkt they will feel that there is a player that understands their needs and offers solutions according to it.
Moreover, with Bakkt, there will be an increased level of liquidity, allowing investors to have a stable market and increased investment options. There is no cryptocurrency exchange with the level of liquidity provided by Bakkt.
Blockchain is helping to shape a new era of investments. Traditional investors will have a platform that is reliable and professional and bridges the gap between traditional financial investment tools and mechanism with the complicated and sometimes extravagant crypto market.