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US shutdown adversely impacts Bakkt’s Physical Bitcoin futures, institutional investors stay on the sidelines of the crypto market

Institutional investors stay on the sidelines of the crypto market

US shutdown impacts Bakkt’s Physical Bitcoin futures

 

 

The much anticipated launch of Bakkt’s physical Bitcoin (BTC) futures scheduled to be released on January 24th gets delayed again, partly due to the US government’s indefinite shutdown. This is the third delay after Bakkt’s initial announcement in August 2018. Earlier launch dates were delayed due to the lack of approval of Bakkt’s physical Bitcoin futures by Commodity Futures Trading Commission (CFTC). The next launch date of this product is not 100% confirmed by Bakkt’s management.

 

Bakkt’s physical Bitcoin futures and why it’s anticipated?

 

Crypto and blockchain market still in its nascent stages, faces many challenges ahead — both regulatory as well as security (for a measure of storage). These have kept institutional investors on the sidelines and impacted mainstream acceptance. 

 

The participation of serious institutional money, think the likes of Morgan Stanley, Goldman-Sachs or Bank of America, could mean a meteoric surge in the investment interest and hence the overall market cap, apart from providing the financial backbone the market needs to mature. Thus, onboarding institutional investors could bring the mainstream acceptance and legitimacy it needs to become a serious worldwide enterprise. 

 

Enter Bakkt with it’s plans to, according to its website, ‘building an open, seamless global network to enable you to buy, sell, store and spend digital assets simply, safely and efficiently’. 

 

These sound like ambitious goals set by many recent Blockchain enterprises, what sets Bakkt apart is its parent company and the companies backing up Bakkt’s goals. Bakkt is the brainchild of the same company that spawned the birth of the New York Stock Exchange, Intercontinental Exchange-ICE. 

 

Backing for Bakkt, crypto trading platform

 

Bakkt is also backed by a marquee of biggies like BCG, Microsoft and Starbucks. Right off the bat, Bakkt aims to include federally regulated markets and auxiliary services, like warehousing, even featuring a crypto-to-fiat exchange which is rare among blockchain enterprises.

 

Jeffrey Sprecher, CEO and founder of Intercontinental Exchange was quoted saying, “In bringing regulated, connected infrastructure together with institutional and consumer applications for digital assets, we aim to build confidence in the asset class on a global scale, consistent with our track record of bringing transparency and trust to previously unregulated markets.”

 

According to the company’s website, Bakkt aims to deliver the following key things


1. Efficiency — Buy, sell,store and spend digital assets within a efficient global ecosystem.
2. Seamless — An integrated global platform for warehousing,trading and commerce.
3. Security — Leveraging Intercontinental Exchange’s market infrastructure.

 

Bakkt’s marquee product is a U.S.- based futures exchange with warehousing plans that physically delivers Bitcoin contracts. This clearhousing plan will interestingly, be backed by a guarantee fund supplied by Bakkt.

 

To know more about how to identify the best exchanges check out InWara’s article on top crypto exchanges

 

The who’s who of the industry has backed Bakkt

 

According InWara’s Venture Capital database, Bakkt received funding from well-known VC firms such as Pantera Capital, Fortress Investment Group, M12, Alan Howard, Eagle Seven, Kingsley Advani, Galaxy Digital, Goldfinch Partners, Protocol Ventures and Horizons Ventures, in a series A funding round that was in the tune of $182 million in terms of round size.

 

On how the funds raised will be utilized, Kelly Loeffler- CEO of Bakkt was quoted saying “We are focused on opportunities to provide new infrastructure, including the industry’s first institutional grade regulated exchange, clearing and warehousing services for physical delivery and storage.”

 

Further, according to Inwara’s M&A database, earlier this month Bakkt announced it’ll be acquiring specific assets of interest belonging to Rosenthal Collins Group-RCG. RCG is an independent futures commission merchant based out of USA. Bakkt hopes this acquisition will help improve its risk management and treasury operations along with anti-money laundering/KYC operations.

 

Kelly Loeffler in reference to the recent acquisition and delay in launch schedule, was quoted saying, “This acquisition underlines the fact we’re not standing still as we await regulatory approval by the CFTC for the launch of regulated trading in our crypto markets. Our mission requires significant investment in technology to establish an innovative platform, as well as financial market expertise to deliver the most trusted fintech ecosystem for digital assets.”

 

According to InWara’s ICO+STO database, 214 companies, in Investment and trading sector have successfully concluded their ICO or Pre-ICO. 39 companies failed to raise sufficient funds and have ceased operation, which is a 18.22% failure rate, in contrast to the 15.5% overall crypto industry average.

Active, Upcoming, Concluded and Failed ICOs till date
Source: InWara’s ICO+ STO database

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Disclaimer: This is not financial advice. To know full details visit t&c

 

 

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