The crypto winter has been the source of a lot of damage in the industry, causing many exchanges and potential launches to suffer.
However, Bakkt’s plans to launch their Bitcoin Futures product have not been impacted. In fact, if anything, an executive from the parent firm has said that the crypto winter has been an advantage.
CEO Jeffrey Sprecher of Intercontinental Exchange (ICE) was involved with the Q1 earnings call recently, saying that the bear market has actually been “helpful” for Bakkt. The launch of the Bitcoin futures project was initially planned for launch at the end of 2018, before being pushed to January. Then, the plan to launch was delayed indefinitely, and there still is no launch date.
Sprecher noted that this was just one benefit of the bear market, because it took off the pressure to launch the product quickly. Another benefit that the company notes is that there are bigger buying opportunities for Bakkt. Explaining, Sprecher said that they have just acquired a company this week – Digital Asset Custody Company (DACC) that wouldn’t have been an affordable option for them last year.
The industry is still maturing by the day, and Bakkt is working hard to be an active catalyst for that growth. There have been many engineers to come into the market as a result of Bakkt’s acquisitions of companies and assets. Sprecher added:
“There’s a lot interest still in this market.”
The regulatory concerns in the market have a lot to do with the delays that Bakkt has experienced. More specifically, it looks like the company is working to custody Bitcoin on its own, while under the supervision of the federal government. Unfortunately, the settlement through the clearing house have placed it in a regulatory gray area.
Even though Sprecher has not spoken much about the reasons for delay, he said that it is clear that the regulators are still trying to understand where the asset stands for regulations. Sprecher explained that it is difficult to reach the institutional markets:
“without being highly regulated and highly trusted so the juice is worth the squeeze.”
There is a lot that has already been “sorted out,” as Sprecher puts it, and there is still a lot to be resolved. However, Sprecher assured listeners on the phone call that Bakkt has “been at the forefront” of the work.
There was no mention from Sprecher regarding how much funding has been spent on Bakkt by ICE so far. However, ICE’s Chief Financial Officer Scott Hill has said that the platform intends to invest between $20 million and $25 million this year. The funding would be on top of the money that was already raised by investors for Bakkt, amounting to $182 million.