BAKKT TO THE FUTURE – Sam MacDonald
Bakkt you say…is that a typo?
No.
Bakkt isn’t just a pun to reminisce over one of the greatest movie franchises of all time; it also, is the name of the International Stock Exchange’s new Crypto platform.
ICE is the parent company of the New York Stock Exchange (NYSE), and the title, “Bakkt” is a clever nod to emphasize it’s a legitimate big-time platform with the full approval of the US government.
If the buzz surrounding its September 23 launch is anything to go by, Bakkt could indeed be the onramp of choice for the mass adoption of digital assets.
Why is Bakkt important?
For the first time ever, there will be a fully regulated Bitcoin futures market available to institutional investors that will be slick, modern, and frictionless.
The doors are open for the big players of finance: hedge funds, pensions, insurance, banks, mutual funds, etc. with trillions of dollars just waiting on the side-lines.
In what might be Bakkt’s most significant feature: all its futures contracts will be settled in Bitcoin, not cash. The huge volumes of BTC this will lock away and bring into the ecosystem should not be underestimated.
Futures? Another Back The Future reference?
Actually no. When we talk “futures” we mean, when someone calls their broker to “long” or “short” a stock.
For example: if you think Tesla shares will be worth more than its current value over a set period of time, you can go “long”, and same if you think it is overvalued, you can go “short”.
Futures differ from ordinary investing. It is considered high risk, as you must place capital behind your position (leverage) that can be liquidated in a heartbeat if things go in the wrong direction. Regardless, futures are a billion dollar industry and big players have been screaming for a trusted onramp for Bitcoin since 17’.
Bakkt means that suddenly, risk-averse institutional & retail investors can enter the market safe in the knowledge they are following the law and that their Bitcoin will be safely stored.
This lends strong confidence to the Cryptocurrency space and unlocks the potential to underpin the increasing demand for Bitcoin, and sure up its long-term survival.
Can it be trusted?
Bakkt is legal and compliant, but its security sets it apart from the pack.
Custody seems to be on everyone’s lips, and it is at the core of the platform.
Bakkt has developed a cryptographically safe system of frozen wallets to store private keys, and keep your Bitcoin secure between trades. It could be argued that this is what makes the platform so groundbreaking.
Imagine trading millions of dollars worth of Bitcoin but having to worry about Private Keys, or managing wallet addresses throughout the process.
Removing friction is a big deal.
In an unprecedented nod, Bakkt has passed all regulatory requirements to launch on September 23, and passing these strict hurdles was the reason the platform did not launch last year, and also why it’s many critics thought it would never launch at all.
Up until now, the lack of surety and confidence in the investment vehicle has been the barrier for large-scale institutional involvement in Bitcoin & Cryptocurrencies. That has now changed, and further, Bakkt opens a pathway for a long awaited Bitcoin Exchange Traded Fund, or ETF.
American authorities have been hesitant to approve a Bitcoin ETF over security and volatility concerns that Bakkt now seems to address.
When the first Gold ETF was introduced in 2003, its value increased nearly 500% in the space of a decade, and one does wonder what an ETF might do to Bitcoin’s long-term price outlook.
It’s hard to dismiss that Bakkt is net-bullish for Bitcoin, even if it may seem overly ambitious. What is known: Starbucks and Microsoft are behind it, so too, the institutional-grade infrastructure of the NYSE. If it can deliver on what it promises, Bakkt may just be the kicker Bitcoin needs to reach all-time highs or foster a new wave of adoption for digital assets.
We will wait and see, but it seems the future is here.
Published at Sun, 25 Aug 2019 02:49:52 +0000
Bitcoin Pic Of The Moment
✅ This image from Marco Verch (trendingtopics) is available under Creative Commons 2.0. Please link to the original photo and the license. 📝 License for use outside of the Creative Commons is available by request.
By trendingtopics on 2019-04-24 21:03:28
