Which is Better for Bitcoin: ETF Approval or Bakkt by ICE and Starbucks
This past summer, the crypto community was hit with huge news: some of America’s largest corporations were teaming up to launch their own cryptocurrency exchange. Today, Bakkt is the biggest crypto news story nobody is paying attention to.
Last month, the Intercontinental Exchange (ICE) revealed that it was launching a crypto platform called Bakkt. That platform would be launched in partnership with Starbucks, Microsoft, and a “who’s who” of other American corporations.
The goal of Bakkt is to create a scalable on-ramp for institutional, merchant, and consumer participation in the cryptocurrency market. Bakkt wants to make it easier for anyone – from hedge funds to average investors – to start buying cryptocurrency.
In a blog post this past week, NewsBTC.com explained that the launch of Bakkt is “the biggest crypto news of the year”. The article explained that the launch of Bakkt was bigger news than the approval of a crypto ETF.
Certain people have been paying attention. Bakkt, for example, has grabbed the attention of the Ironwood Research Group, a team of analysts and traders who run the “Not Financial Advice Show” podcast. This past week, the podcast spent 14 minutes picking apart Bakkt, explaining its business model, and forecasting where the company could go next. By the end of the segment, the team had concluded that Bakkt was “bigger than ETFs” for the crypto space. You can listen to an excerpt here.
Fundstrat’s Tom Lee and CNBC’s Brian Kelly have also spent significant time evangelizing Bakkt and its impact on the crypto community.
Bakkt is Likely to Get Approval from the CFTC
One of Bakkt’s core services is to offer bitcoin futures contracts.
Of course, you can already buy and sell bitcoin futures contracts today. So what makes Bakkt’s bitcoin futures different?
Bakkt will back its bitcoin futures physically. That means they’re going to purchase bitcoin, remove it from the market, and store that bitcoin in their warehouse for the duration of the futures contracts.
These contracts will be one-day transactions. There will be no leverage or margin trading on them.
“In my opinion,” explains the analyst on the IRG podcast linked above, “this information is really bullish for the market, especially when it comes out.”
The IRG podcast also claimed that the contracts were likely going to receive approval from the Commodity Futures Trading Commission (CFTC).
Bakkt Has Bold Plans for the Future
Bakkt’s first goal is to launch bitcoin futures contracts backed by physical bitcoin. These contracts should be launched by November 2018.
The IRG analyst explained what could happen next:
“So if November comes along and Bakkt rolls out futures and they meet their targets and they have successfully rolled out on their platform, they have a lot more on their plate that’s coming right after. That is why I think that Bakkt is so much more important than ETFs.”
Bakkt’s three largest partners are Microsoft, Starbucks, and Boston Consulting Group. Microsoft is rumored to be focusing on the technical side of the platform. Starbucks, however, may be the most intriguing member of the partnership.
Starbucks has led the way on technologies like mobile ordering and mobile payment technologies. Could the Starbucks partnership with Bakkt spur the mass adoption of cryptocurrency? If Starbucks isn’t interested in crypto, then why are they such a major partner with Bakkt? Could we be buying frappuccinos with crypto within the next year?
ICE is also the parent company of the New York Stock Exchange. Many of the proposed bitcoin ETFs have suggested listing their shares on NYSE Arca. As investors wait for bitcoin ETF approval, Bakkt could soon launch similar products on the New York Stock Exchange. ICE clearly sees potential in the future of crypto.
These are exciting times for the crypto community, and investors are starting to realize just how important the Bakkt news could be.