Bakkt really is going live. Soon. And according to Fundstrat it looks like things could get very interesting.
It was supposed to launch last year: the great hope for slaying the bitcoin bear and catalysing a new uptrend, the likes of which crypto has never seen before. Bakkt’s physically-settled bitcoin futures were going to be a game-changer that saw institutional money pour into crypto after the SEC repeatedly denied all of the many different Bitcoin ETFs.
But it was not to be, not in 2018. Bakkt was delayed again and again, mainly by regulatory concerns. The key issue was custody: because the bitcoins would be ‘physically delivered’, they needed storing safely. Other futures markets are ‘paper’ contracts that do not entail BTC actually being bought. This is why Bakkt is so different and so promising: its BTC futures involve coins being bought and held, reducing supply and so filtering through directly to the underlying market. But this also raised questions from the CFTC about how to do this securely – enough exchanges have been hacked or compromised for that to be a legitimate concern.
Bakkt responded by actively making acquisitions and buying in the tech, infrastructure and talent to address the problem. Today, it’s going live with its first users – who will act as guinea pigs for the platform, testing out its functionality and ensuring all goes smoothly. Full launch is set to be later this quarter – i.e., within the next two months.
‘Huge catalyst for institutional participation’
@fundstratQuant Sam Doctor recently tweeted: ‘We think #Bakkt could be a huge catalyst for institutional participation in the #crypto market. Here are our takeaways from the Bakkt institutional summit yesterday at the NYSE…’
The attached image gave a summary of why they believe Bakkt will be such a big deal. In short, there is a large amount of institutional interest in bitcoin, and regulators are seeing increased demand for crypto products from the public. The most exciting point in the list is the last one: ‘There appears to be a critical mass of adopters ready to come on board on Day 1 of the Bakkt launch.’ And that could prove ‘a huge accelerator for market growth’.
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