Prominent Crypto Legal Expert Jake Chervinsky Talks Bakkt's Impact On Bitcoin Market

Jake Chervinsky Says The Community Shouldn’t Overestimate Bakkt’s Impact on the Crypto Market

Jake Chervinsky, a recognized lawyer and a government enforcement defense and securities litigation attorney at Kobre & Kim LLP, says not to overestimate Bakkt’s impact on the market.

In the last months, Bitcoin (BTC) operated relatively stable. Bakkt could work as one of the catalysts to help Bitcoin and other virtual currencies grow in the market. Nevertheless, Mr Chervinsky says that it is premature to analyse the effects of Bakkt in the crypto world.

He explained that the Bakkt platform and the narrative around it play a similar role to the one Bitcoin exchange-traded funds (ETFs) have. Nevertheless, the Bakkt platform does not have to be in touch with the U.S. Securities and Exchange Commission (SEC) and its approval.

Bakkt is a platform that has been designed by the Intercontinental Exchange (ICE) in order to offer institutions and wealthy investors the possibility to have access to the cryptocurrency market. The ICE has several years operating in the financial sector and authorization from the Commodities and Futures Trading Commission (CFTC) to operate in the market.

Bakkt can simply operate a futures market, since December 12, just by filing a license before the official launch date of the services. Bakkt will be delivering BTC to buyers of Bitcoin futures contracts. However, the BTC delivering will be physical. That means that it will have an impact on the supply of the most important virtual currency in the market.

At the same time, Chervinsky explains that the ICE attracted several big-name partners to the Bakkt project including Starbucks, Microsoft or BCG. He says that the first phase will be allowing institutions to purchase contracts of one Bitcoin. This can be very positive for investment plans but not so useful for commercial transactions. Nowadays, it is not easy to perform commercial transactions in increments of one Bitcoin.

As Chervinsky mentions, the second phase has not been revealed by ICE. He believes that this could be some type of consumer-grade payment system.

However, there are still some issues and variables that will define Bakkts long-term growth. As mentioned before, the Bitcoin futures services that Bakkt will be offering is just the beginning. In the future, new products are expected to be unveiled, depending on how the market reacts to them.

Until the second phase is unveiled and ready to work, it would be too early to know and determine whether Bakkt will have a positive impact on the industry and in Bitcoin’s price or not.

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