Bakkt: Latest Bakkt Bitcoin Futures & Crypto Exchange News
Welcome to our Bakkt News overview. Find all featured Bakkt bitcoin exchange updates here.
Bakkt first made headlines on August 3, 2018 when news broke about Microsoft and Starbucks being involved with Intercontinental Exchange (ICE)'s bitcoin futures exchange, who also owns the New York Stock Exchange (NYSE). From day one, the highly-anticipated bitcoin-focused cryptocurrency exchange has been geared for the big leagues and catered to the institutional investors of the world.
In what will likely be a fireworks launch date when officially announced (changed a few times now) and a sure-as-it-gets bet of being a bitcoin price catalyst, below is all of the news about Bakkt's digital asset infrastructure and its plans for global adoption and use.
Latest Bakkt News: Featured Bitcoin Futures and Crypto Exchange Updates
ICE's Bakkt Bitcoin Futures Trading 2019 Launch Plans
While no one knows when the official Bakkt bitcoin futures crypto trading exchange platform is going to launch, it has arguably become the most-anticipated crypto-centric entity set to release in 2019. Most are banking on the closer-than-ever day to come due to its near inevitable bitcoin boosting properties that it will bring and attract to the greater world. Since the original news announcement from Wall Street Journal (WSJ) about Bakkt titled “NYSE's Owner to Launch Bitcoin Firm, Futures Contract“, the first possibility of ICE's Bakkt to go live was in December 2018 but has met a few barriers and roadblocks so far.
While the news about Bakkt's launch date release continues to linger, in which their original date obviously did not happen, it still has the potential to be an absolute game changer in the world of cryptocurrency. For those wondering, yes, essentially just like the bitcoin futures exchange's name is pronounced – ‘backed' – the owner of New York Stock Exchange, aka Intercontinental Exchange, has since backed-up the Bakkt grand opening until at least quarter 4 of this calendar year.
Pros And Cons Of The Launch Of Bakkt In 2019
The supposed launch of Bakkt in January 2019 (after originally hoping for December) was set to be a major landmark for the crypto industry. Bakkt is an ambitious crypto startup supported by some major players in the American corporate space. Some believe the launch of Bakkt’s crypto trading platform will kickstart the next bull run. Others believe the launch of Bakkt will have minimal impact on the community.
What are the pros and cons of the launch of Bakkt?
Martin Weiss of Weiss Cryptocurrency Ratings recently sat down with Dr. Bruce Ng to discuss the pros and cons of the launch of Bakkt. Dr. Ng is an expert in distributed ledger technology (DLT) and does technical crypto analysis work for Weiss Cryptocurrency Ratings, a ratings agency dedicated to analyzing various crypto projects. We’re generally assumed that the launch of Bakkt is going to have a net positive effect on the crypto space – but that’s not guaranteed.
Let’s take a look at some of the pros and cons of the launch of Bakkt as explained by Dr. Ng.
What Is Bakkt And Why Is It A Big Deal?
Bakkt is a crypto startup that burst onto the scene in August 2018. At first glance, Bakkt looks like a huge deal for the crypto industry.
First, Bakkt is owned by Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange (NYSE). ICE was responsible for bringing added legitimacy to gold markets in the early 2000s while paving the way for investment products like gold ETFs.
Second, Bakkt is supported by some of America’s largest and most powerful corporations. Starbucks and Microsoft, for example, have invested in Bakkt. What exactly does Bakkt want to sell? Bakkt will provide crypto on-ramp services to institutions and retail investors.
They will allow retail and institutional investors to more easily buy, sell, and trade cryptocurrencies. Thanks to Bakkt, anyone who wants to buy crypto will be able to do so in a safer, easier, and more regulated way. When Bakkt launches, institutions who have wanted to invest in crypto will be able to do so. These institutions may have money “sitting on the sidelines” waiting for an institutional custody service like Bakkt to launch. That all sounds good – but there are obviously some pros and cons to the launch of Bakkt. Let’s take a closer look.
Why The Launch Of Bakkt Will Be A Good Thing For Crypto
The launch of Bakkt will be a good thing for the crypto space for all of the following reasons:
- Bakkt will provide a scalable crypto trading platform for institutions who wish to invest in cryptocurrencies
- Overnight, institutions will have a safe, secure, and regulated way to buy cryptocurrencies in a trusted trading environment
- Bakkt will offer a regulated custody service for secure storage of real bitcoin
- Bakkt will have a payment platform allowing customers to pay with crypto for anything from a Starbucks coffee to computer products from Microsoft
- ICE, the owner of the New York Stock Exchange, is the parent company of Bakkt and brings enormous experience and influence to the company
- ICE not only owns Bakkt and the NYSE; they also own ICE Data Services, SuperDerivatives, TMC Bonds, The Clearing Corporation, Singapore Mercantile Exchange, and many other entities
- Last year, ICE reported profits of $5.8 billion; the company has 5,000 employees worldwide and a stellar reputation
- In addition to Microsoft and Starbucks, Boston Consulting Group has also invested in Bakkt; Boston Consulting Group is a major partner that is expected to open the door to crypto investing to a host of Fortune 500 companies
- Starbucks is America’s leader in mobile app payments with 23 million users; that’s more than Apple Pay (22 million users) and Google Pay (11 million)
- Bakkt will emphasize futures trading with real, physical bitcoin, not the leveraged bitcoin trading we see on existing futures markets like CME and Cboe; that means any bitcoin bought on futures markets from Bakkt will be real bitcoin and will be added to the company’s custody, directly boosting demand on the market
For all of these reasons, Bakkt is expected to draw big institutional money into the crypto space while ushering in a bull market. Due to all of the advantages listed above, Bakkt will cause markets to surge while paving the way for a brighter crypto future. Of course, it’s not all sunshine and rainbows. There are some cons to the launch of Bakkt.
Cons Of Bakkt
Bakkt’s launch could have some negative effects on the crypto space, including all of the following:
- Bakkt could lead to the launch of high-risk crypto derivatives, including derivatives similar to the one that aggravated the 2008 debt crisis (which, ironically, led to the rise of bitcoin in 2009)
- Big Wall Street institutions could use their enormous sway and capital to manipulate or exaggerate the price of bitcoin and other cryptocurrencies, playing big games with each other while smaller investors lose
- Bakkt will increase the institutionalization of bitcoin, which some crypto enthusiasts find worrying; bitcoin was founded as a decentralized system outside of the control of financial institutions and governments
Bakkt’s team, meanwhile, is assuaging all of these concerns. The Bakkt team insists that there will be no leverage, commingling, or rehypothecation, for example. All bitcoin traded on the Bakkt platform will be linked to real, physical bitcoin. This should avoid many of the derivative-related problems the financial industry has experienced in the past.
4 Reasons The Launch Of Bakkt Will Be A Good Thing
The launch of Bakkt is expected to be a good thing for the crypto industry for all of the reasons below:
More Volume: Bakkt will make it easier for retail and institutional investors to participate in crypto trading. Bitcoin futures market trading volume has been lagging lately, and some believe Bakkt will rejuvenate the space.
ETF Approval: Some believe that the launch of Bakkt will lead the way directly to bitcoin ETF approval by the SEC. The SEC has repeatedly expressed concern with price manipulation and inadequate price discovery in the bitcoin world. Bakkt will solve these issues with a regulated crypto platform and custody solution.
Institutional Custody: Bakkt will provide custody solutions to institutional investors. Institutional investors can participate in crypto without handling crypto themselves.
Regulated ICOs: Bakkt could facilitate the launch of regulated ICOs, paving the way for companies to launch token sales in the future in a legal, regulated, and secure way.
Bakkt is expected to launch its first product, bitcoin futures trading, on January 24, with other products rolling out throughout 2019. Optimists believe the launch of Bakkt will cause billions of dollars to pour into the crypto space from institutional investors.
Pessimists, meanwhile, point to the fact that institutional-grade custody services are already available and that institutions already have a way to invest in crypto. Ultimately, the community assumes that Bakkt will have a net positive effect on crypto. However, it’s not exactly a foregone conclusion, and there are certain cons linked to the launch of Bakkt.
Nevertheless, it appears that Bakkt could be a major turning point for the crypto space and that 2019 could be a landmark year for crypto adoption.
Intercontinental Exchange (ICE) Bakkt's Pros Vs Cons For The Cryptocurrency Market
One of the most important and positive news this year is related to the Intercontinental Exchange (ICE) joining the cryptocurrency space. Some weeks ago, the ICE announced that it was entering the crypto world with a new platform known as Bakkt. But what does it mean for the market?
According to the MIT Technology Review, there is an important number of institutional investors ready to enter the cryptocurrency market and place their bets on the space. With the latest announcement made by ICE, these investors could soon be able to enter the market. In general, these institutional investors need to have a good infrastructure, and regulated by the most important regulatory agencies in the world. And the ICE is working in order to provide this solution.
However, there are some important points to mark about why cryptocurrencies do not work in the same as the stock market. According to Caitlin Long, a Wall Street and blockchain expert, cryptocurrencies could be a big disadvantage for some institutional investors. The first point he marks is related at how the assets are stored and managed. Cryptocurrencies are different to stocks in the way they are managed.
For example, stocks and assets are possessed by market mediators. Virtual currencies, instead are owned and managed by the traders. While cryptocurrencies such as Bitcoin (BTC) or Litecoin (LTC) transactions are broadcasted to a decentralized network (immutable), Wall Street companies can manipulate transactions and asset ownership. Using blockchain technology solves an important problem: double spending. It is not possible to spend two times the same amount of funds since the transactions are processed to an immutable ledger. However, the stock market works in a different way, opening a world of vulnerabilities.
For example, Dole Foods sold 33% more share than it actually had because there was a glitch in the trading process. Although there are many difference between how the stock and cryptocurrency market work, there are some very important and positive points to take into account. Mr. Long believes that Bakkt will be providing a solution to the custody issue that important investors face. We are talking about investors that manage more than $150 million dollars that are required by the SEC to have a qualified custodian.
Starbucks Launches Bakkt Cryptocurrency Platform in Microsoft and ICE Partnership
Starbucks Partners with Microsoft to Allow Bitcoin Payments
One of the most popular coffee chains in the country is making a big move when it comes to its payment system. The company is partnering with Microsoft to develop a digital platform that will allow customers to use bitcoin and other cryptocurrencies as a form of payment when they purchase from Starbucks. The partnership will establish a new company, called Bakkt.
The company gives customers the opportunity to buy, sell, store, and spend crypto on the global network. The company and its payment platform are expected to launch by November. Maria Smith, Starbucks’s Vice President of Partnership and Payments stated:
“As the flagship retailer, Sarbucks will play a pivotal role in developing practical, trusted and regulated applications for customers to convert their digital assets into US dollars for use at Starbucks.”
She further added:
“As a leader in Mobile Pay to our more than 15 million Starbucks Rewards members, Starbucks is committed to innovation for expanding payment options for our customers.”
There are certainly some who are skeptic of the project’s viability due to the volatility of crypto. For example, Bitcoin has decreased in value by 50 percent this year and it can fluctuate over the course of a day as well. On the other hand, there are those who believe that Starbucks adoption of cryptocurrency may help bitcoin become a mainstream currency. Brian Kelly, the CEO of BKCM stated:
“It’s very big news for bitcoin because people say, ‘Where can you spend it?’ Now at every single Starbucks.” And “Starbucks is seeing some kind of demand for acceptance of crypto and bitcoin and to tie up with a huge regulated institution like ICE is really positive for the space.”
This news has sure caused some reactions on social media today. Lets take a look:
Intercontinental Exchange's Bakkt Bitcoin Futures Platform Delays Launch, Jan 24, 2019 as New Date
Bakkt, a cryptocurrency exchange created by ICE, the Intercontinental Exchange, has recently announced that it would delay its plans to launch its Bitcoin futures business.
According to the update of the company, the first product of Bakkt, which would have been originally unveiled in August, will now be launched on January 24, 2019, instead of December 2018. According to this new information, trading and warehouse operations will now only start on this date.
Kelly Loeffler, the CEO of Bakkt, has affirmed that the company needed more work to put everything in the final place to start the operations. She has also added that the new listing timeframe will provide additional time for the customers and clearing members to prepare.
The main reason is that the platform has to be tested more and that it would simply be a better idea to adjust the timeframe of the launch than to actually launch any product that could harm the investors in any possible way, the exchange operator affirmed.
The Launch Was Supposed To Be Made In December
Initially, the idea was to launch the Bakkt crypto exchange and its services on December 12. Instead, now the platform will continue testing its limits and efficacy in 2018. The new date was affirmed to be still open to regulatory approval and can still change. All the Bitcoin futures that will be launched on the platform will be physically-settled Bitcoin futures.
What does this mean? It means that all the Bitcoin will be received by the client at the expiration of the contract instead of the equivalent in cash. The company has also affirmed that it will offer more than just Bitcoin futures and that it will look for more products to give to the clients.
At the moment, the exchange will still not announce other options besides the fact that it will keep Bitcoin in cold storage for the clients whenever they need it. All of the Bitcoin stored in these wallets will be also insured. Some people speculated whether the company has decided to postpone the launch because of the Bitcoin bear market, but these are only rumors at this point and nothing is actually sure.
How ICE Bakkt Crypto Trading Platform Could be Institutional Investors Gateway
Bakkt Trading Platform Could Spark Institutional Interest
As the cryptocurrency community continues to vie for the attention of Wall Street, new platforms for day trading are being released every day. These trading tools are primarily used to try to gain the support of institutional investors. Gaining access to this big money would be huge for Bitcoin, a currency which has long existed outside of the accepted norm for financial trade in the economic and exchange sectors. But the outlook has been less than promising for cryptocurrencies in 2018.
Aside from the massive price crash and struggle to recover experienced by even the strongest and most consistent of coins, this year has also seen the outright rejection of several applications to host a Bitcoin ETF, or an Exchange-Traded Fund. While these ETFs would have attracted even more Wall Street money to the Bitcoin trading markets, their rejection has meant that the cryptocurrency sector must find new and exciting ways to entice the interest of institutional investors who, in many ways, hold the key to a confirmed bull market.
Bakkt is a global digital assets platform which was started by an unlikely coalition between Starbucks, Microsoft and Intercontinental Exchange (ICE) on the New York Stock Exchange (NYSE). Plans to start the new exchange platform were announced earlier in August, and the community is abuzz dissecting and discussing what the new “on-ramp for investors” might do for the price of currencies—and for the future of the markets.
Bakkt was started by Starbucks and the New York Stock Exchange, a coalition which has been christened by Starbucks announcing that they would be willing to allow customers to purchase their goods using various digital currencies in order to jump-start interest on and participation in the platform.
Aside from Starbucks, the collaboration also boasts big names like Microsoft and BCG, who will help with the technical side of the operation. At its core, Bakkt is supposed to function as an “on-ramp” for a variety of market participants that have been previously unacquainted with the cryptocurrency markets.
By emphasizing security, ease of user-interface, and efficiency, the scalable platform will function as a one-of-a-kind institutional exchange in a desperate bid to gain hold of the institutional investors which exchanges like the NYSE already have.
A Core Feature
According to the CEO of the LMAX Exchange, David Mercer, Bakkt has one feature in particular that just might be enough to bring in droves of new institutional investors—their 1-day futures contracts. These unique contracts, as the name might suggest, expire after just one day.
However, they are also unique in their method of profit delivery. When the contract expires after a day, it doesn’t deliver cash or a theoretical “IOU” to the trader, but instead provides them with physical Bitcoin. Typically, a trader would be forced to pay for the difference or reap the difference between the price at which they bought the coin and the price that the transaction eventually settled at. But with physical Bitcoin remuneration in the process, the trader is paid the difference in Bitcoin.
This is important, according to the executive, because it forces the infrastructure facilitating the trade to actually transfer cryptocurrencies. Additionally, he argued that it would require that the CFTC, the regulatory authority for physical commodities in the United States, sign off on the process before it hits the market.
In this regard, Bakkt is ready to fight the good fight. Their corporation has actually begun working on both the procurement of a physical warehouse and the legal tools necessary to apply for CFTC approval in November of this year. Whether they succeed or fail, there is no doubt that significant weight is being thrown around behind Bakkt—and it is weight in favor of institutional adoption.
Bakkt Snatches Up Tom Noonan, Once with IBM and Cisco, to Join Its Executive Board of Directors
Bakkt announced today that Tom Noonan, a former executive from the IBM and Cisco board, was hired as the new chair of the board of directors of the upcoming crypto exchange. He will be accompanied on the board by Jeff Sprecher (ICE CEO), Kelly Loeffler (Bakkt’s head), Sean Collins (managing partner at Goldfinch Partners) and Ashley Naheta (Softbank).
Noonan was described as a cyber expert, which he definitely is. He participated in the foundation of three companies: Internet Security Systems (bought by IBM in 2006), JouleX (bought by Cisco in 2013) and Endgame. He is also part of the Intercontinental Exchange’s (ICE) board of directors.
Bakkt To Launch Soon
Bakkt’s launch is set to be very soon. The company is currently only waiting for the approval of the Commodity Futures Trading Commission (CFTC) to start selling its physically settled Bitcoin futures. Loeffler has affirmed that the start of the company will probably help Bitcoin to increase its own price since the market will have a trusted company working in it now.
Also, the fact that the company is set in the U. S. market, which is very regulated, is another positive point for market confidence. The company will offer digital custody of the futures at the same time that the clients will have their investments physically settled, so they will also have ownership of the assets at the same time that they are safely stored. At the moment, however, it is not clear when the platform will finally be ready to be online.
The launch has been already delayed two times and now the company does not even have a set date, probably because the team is afraid to have to postpone the launch again. Part of the delay is because the CFTC has to approve the Bitcoin custody plan before the business starts working.
However, in order to appease the regulators, the company is working closely with the regulators at the moment. The process is hard because the normal standard is for banks to store the assets of the companies, but Bakkt will store its own assets, which is a little bit more complicated and requires approval. Loefller has affirmed, though, that the company is making considerable progress and that the products will be ready for this year.
Nobody expects Bakkt to be launched before May because the CFTC generally opens a 30-day public review before approving or disapproving proposals, so we’ll know the date when they finally do it. After its series A funding round, Bakkt is currently valued in around $740 million USD and the company has not even opened its doors yet.
Bakkt Expected to Launch in 2019: An Outlook on How It Could Contribute to the Crypto Sphere
As the Intercontinental Exchange (ICE)’s digital asset platform, Bakkt starts to come together, understanding its specs become crucial.
As noted in Bakkt’s official Twitter page, the project has already started filling in vacant positions and news outlet, Cointelegraph has also quoted that the CEO of ICE has confirmed Bakkt’s launch to take place in 2019. The following piece will explore the different facets of Bakkt, its potential contribution to the crypto sphere, and the hurdles it has come across.
Backed by ICE’s notable financial market infrastructure, Bakkt has been described as a digital assets platform that will help investors “buy, sell, and store assets in a simple, safe and efficient manner.” In addition, it has been portrayed as a platform that is surely to meet regulatory guidelines and one founded on trust, where the latter is something that is doubted of by the general public.
Although their primary goal is to get the general public involved in cryptocurrencies, ICE also plans to launch a “physically delivered bitcoin futures” for institutional investors. Plans for such a platform was first revealed in August of 2018. As per Cointelegraph, the CEO of Bakkt, Kelly Loeffler believes this endeavor will bridge the gaps between different types of consumers, i.e. investors, merchants, etc. As per Loeffler herself, the goal is to
“build an open platform that helps unlock the transformative potential of digital assets across global markets and commerce (2018).”
Since its reveal, many interesting partnerships have been formed. Some of which include Microsoft, Wall Street’s very own firms, Boston Consulting Group (BCG) and even Starbucks to name the least.
As previously mentioned, the notion of trust is an important factor to consider as 2018 also marked a year filled with scams, hacks, MLM schemes and crypto theft – all of which have negatively impacted the crypto sphere. This is especially the case for institutional investors, as most remained and continue to remain on the sidelines, as opposed to diving into the world of cryptos. According to the Founder and CEO of XDAT, Prashanth Swaminathan, Bakkt signifies some confidence, but doubt will still exist until returns help investors overcome it. His exact words went as follows:
“Institutional investors will still be wary of the space until they see regulations coming in […] Institutional investors also need to see returns and the best metric to gauge such return is mass adoption (or demand-supply).”
Bakkt’s Notable Features
Physically-Delivered BTC Futures
As previously mentioned, Bakkt has plans to offer a physically-delivered bitcoin futures. The need for such assets has been trusted as being a necessity as it could help in cryptocurrencies’ volatile markets. How? Futures are viewed as a “risk management tool”. To date, only two exchanges seem to offer BTC futures including Chicago Mercantile Exchange (CME) and the Chicago Board of Options Exchange (CBOE).
What differentiates the futures offered by Bakkt and those of CME and CBOE is that the latter settles them in cash, whereas the former seeks to deliver, “one-day BTC futures contracts”. That is, upon an expiring contract, investors will get BTC instead of cash.
Again, both Loeffler and Swaminathan seem to hold similar views, as both see it is being ideal to give returns in BTC rather than cash because of the very physical delivery and its ability to reflect market development. As for the clearing process, once the day closes, amounts will be transferred from buyers to sellers’ accounts and buyers will then be able to pick up their BTC from Bakkt’s digital warehouse.
The entire clearing and storing process is supposedly controlled by the U.S Commodities and Futures Trading Commission (CFTC).
Bakkt’s Warehouse Deemed Safe Storage?
The next feature worth mentioning is that of safe storage, which in Bakkt’s case is primarily reflected by its digital warehouse, and AML and KYC policies. To maximize safety, Bakkt will store the private keys in its warehouse with an incorporated double-key security system (i.e. clients use private key and Bakkt uses public key for releasing funds).
“Microsoft’s Azure and Off-Blockchain Transactions”
As found in Cointelegraph’s post, Bakkt is based on Microsoft’s Azure cloud computing service. This has supposedly been done to deal with BTC’s scalability concerns. Loeffler believes keeping the ledger away from blockchain is better as it prevents congestion.
It seems like retail payments is something that has yet to be addressed in the short term. In particular, the Co-Founders plan to incorporate retail payments as a way to increase BTC uses and to help make it a norm in the long run. This could be the reason why Starbucks has joined, as the beverage firm seems to deliberate the likes of BTC acceptance for its franchises as well.
Some Setbacks Bakkt has Since Overcome
Like any new endeavor that has been suggested within the crypto sphere, Bakkt has also witnessed several setbacks. What was expected as a potential launch in November 2018 has moved to January 24th, 2019 and now, to later 2019 reports Cointelegraph. Despite the backlash from regulators, Bakkt has supposedly progressed, as per a Medium Post they’ve shared on December 31, 2018. In particular, the team has managed to
“acquire certain assets of Rosenthal Collins Group (RCG) […] with nearly 100 years of earning clients’ trust.”
This acquisition is believed to contribute to Bakkt in the following ways:
- Increase risk management
- Increase treasury operations with systems and expertise
- AML/KYC and customer service operations
- Bring more choice and control to buyers and sellers
Most importantly, “The acquisition underlines that fact that we’re not standing still as we await regulatory approval by the CFTC for the launch,” notes Loeffler.
Besides the acquisition, the project has since raised $180 million from its 12 partners and investors, which indicates high anticipations, trust and progress. As we sit around for the long-awaited Bakkt launch, the aforementioned features and problems are some factors to keep in mind, as they both have the ability to impact Bakkt’s success altogether. In the meantime, consumers and investors are suggested to keep up-to-date via the following sources:
- Twitter: https://twitter.com/bakkt?lang=en
- Medium: https://medium.com/bakkt-blog
- Official Website: https://www.bakkt.com/index
- LinkedIn: https://www.linkedin.com/company/bakkt/
New Bloomberg Report Indicates ICE and NYSE's Bakkt is Seeking New York Crypto Exchange License
The Intercontinental Exchange (ICE), the owning entity of the New York Stock Exchange, has allegedly set its sights on acquiring a New York License, which is also known as a ‘Crypto License' or ‘BitLicense' in order to legally operate its own Cryptocurrency exchange, Bakkt which, along with other crypto entities, has been under a series of delays.
Bakkt is on the Hunt for Additional Crypto License in New York for a Crypto Custody Service
For Bakkt specifically, its launch was subject to a series of unfortunate setbacks which have resulted in it being held up for five months as of writing.
Apparently this has attributed to Bakkt's over persuading the United States' regulatory agency – The Commodity Futures Trading Commission (CTFC) in order to obtain a fast approval to serve as a custodial service for Bitcoin along with its physically held and delivered futures contracts. In order to get over the current hamstrung situation, the ICE sees the successful obtaining of a license from the state of New York (one of it's ‘Crypto Licenses') as a way of getting around these regulatory delays.
The Exchange believes that by acquiring one of these licenses from the New York Department of Financial Services (NYDFS), it will be able to finally get its long-delayed exchange into action, according to a report conducted by Bloomberg this week. One of the added advantages that comes with providing users with Physically settled contracts is that buyers would be able to receive the real commodity, which would be bitcoin in this instance, at a mature point.
There are a couple of things that work to hold up the entire process of application, one of these being working from a back-log caused by a government shutdown in the past months, as well as an underlying concern that exists with regards to Bitcoin and cryptocurrencies in general.
For example, the CFTC has expressed a number of concerns when it comes to the matter of client safeguards, especially with relation to the Bitcoin that they hold as a futures product. By having the ability to trade on a state level, specifically demonstrating itself in action in the state of New York, this may help to alleviate some of the qualms that the CFTC has with providing it with legitimacy.
In addition, Bakkt may very well be heading in a similar direction as Starbucks, in providing the apparatus and conditions necessary to use Bitcoin as a medium of payment in the world of retail. While this is a longer-term plan of the company, this aspiration may be another reason for the CFTC's hesitation.
Hypothetically, should the Intercontinental Exchange prove successful in getting registered to operate in New York, it may, in fact, be allowed to issues its futures, going forward, by a process of self-certification in the eyes of the CFTC, allowing it to get past the over-long process of adhering to the regulatory body's requirements that a client's funds are deposited into a bank or dedicated trust firm.
While this sounds good hypothetically, even if the ICE were to successfully obtain a Crypto License from the state, it would still have to get a green light to commence operations from the CFTC, especially where it relates to the broader operations conducted by the exchange, according to the Bloomberg report.
News sources have since tried to make contact with a representative from Bakkt, but they have since refused to comment on this matter, the same is true of the New York Department of Financial Services (NYDFS).
The Intercontinental Exchange has also announced its intention to launch Bakkt as a service provider back in December 2018, but due to both the government shutdown and other issues, the deadline was pushed back to January 24th. And again, on New Years Eve, this deadline was, itself, pushed back, with the exchange going on to announce that its target of late January – “will be amended pursuant to the CFTC’s process and timeline.” With the regulatory bodies gears sluggishly turning and moving along, Bakkt has been working steadfastly to improve its range of products and accompanying systems in order to sharpen up for its eventual user-base.
Over January, Bakkt CEO, Kelly Loeffler went on to announce that the company would be acquiring assets originally under the ownership of Rosenthal Collins Group, a company initially known as a futures commission merchant. Bakkt has also been working to acquire a range of executives with a robust pedigree behind them, including those from the likes of international companies like PayPal and IBM.