2019-1-8 21:29 |
Bakkt Postponement Will Delay Launch Of Institutional Crypto On-Ramp
The launch of Bakkt has been one of the most-anticipated events in the crypto community over the past year. With Bakkt delayed once again, however, it seems the crypto community will have to wait for the institutional crypto on-ramp of the future.
On December 31, Bakkt announced that it was once again pushing back its launch date. Originally scheduled for November 2018, the launch of Bakkt was pushed back to January 24, 2019 in the fall. Then, on December 31, Bakkt delayed the project once again, rescheduling the launch date to “early 2019”.
It’s unclear what “early 2019” means, but it seems likely that the launch will occur sometime in Q1 2019 – either January, February or March.
When launched, Bakkt is expected to be an effective institutional on-ramp for cryptocurrency investors. Analysts will tell you that “trillions” of dollars of institutional capital is sitting on the sidelines of the crypto space, just waiting for a company like Bakkt to launch. When Bakkt launches, it will provide an effective investment platform for those institutions overnight. The so-called “Bakkt boost” could even propel the crypto community into the next bull market.
Bakkt isn’t just some flashy startup making big promises: the company’s parent company is ICE, which is the same parent company of the New York Stock Exchange. Bakkt also has the support of some of America’s largest corporations, including Microsoft and Starbucks. Bakkt, to say the least, should be a big deal.
Last month, Bakkt announced that it had successfully completed a $182 million first round seed raise from 12 partner investors.
Should We Be Worried About Bakkt?Bakkt was originally scheduled to launch in November 2018. Then, the launch date was pushed back to January 24, 2019. Now, the launch date of Bakkt is vaguely scheduled for “early 2019”.
Should the crypto community be worried about all of this waffling? Or is this to be expected in the tumultuous world of crypto?
We see little reason to worry about Bakkt. The company raised $182 million last year. It has some of America’s largest corporations and investors pushing for its success. Its parent company, ICE, has a proven track record.
Some suggest that Bakkt’s delays are related more to regulatory hurdles than anything else. Bakkt claims to be working closely with the CFTC to cross the final regulatory hurdles before launch.
Bakkt Will Offer Physical Settlement Of Bitcoin Futures In An Institutional-Grade EnvironmentBakkt plans to offer a full-featured crypto on-ramp to institutional investors and other members of the crypto space. One of the first products offered by the company, however, will be bitcoin futures. Unlike today’s bitcoin futures, bitcoin futures sold on Bakkt will be physically settled. This is designed to facilitate more effective price discovery. It’s one reason why analysts see Bakkt as a game changer for institutional investors seeking exposure to the market.
In the meantime, some of the world’s largest financial institutions have already established crypto trading desks. Fidelity, JP Morgan, and Goldman Sachs, for example, have all launched their own crypto trading desks. If even a minuscule portion of these company’s portfolios is invested in crypto through Bakkt, it could launch a bull market overnight.
Physical settlement of bitcoin futures is one reason why Bakkt is revolutionary – and it’s only the first product expected to be launched by the company. Watch for Bakkt’s bitcoin futures to arrive on the market in early 2019.
Bakkt Will Also Offer Centralized Custody SolutionsAnother reason why Bakkt is seen as revolutionary is its centralized custody solutions. Bakkt will make it easy for institutional investors to store their money securely.
Today, institutions can’t leave billions of dollars sitting in exchange wallets. Certain exchanges – including Coinbase and Gemini – have established institutional-grade custody solutions. However, there’s certainly room for improvement, and Bakkt aims to be that improvement.
By buying bitcoin from a federally-regulated exchange, institutional investors can relax knowing their money is stored in secure, insured vaults that meet their strict standards.
Bakkt’s centralized custody solution will store private keys offline in a heavily-guarded digital warehouse. Funds will be secured and insured, giving institutional investors peace of mind that they will be protected regardless of what happens.
Ultimately, Bakkt is a revolutionary company that will transform the crypto community overnight – but we just have to wait a little bit longer for Bakkt to launch. Watch for the launch of Bakkt in early 2019.
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