What is Bakkt? — The New Digital Asset Exchange from ICE
To answer the question of what is Bakkt, we must first take a step back. We must look at the organisation behind this set up and what their motives are. The Intercontinental Exchange, or ICE as they are commonly known, is the overarching organisation in question here.
Originally founded in the year 2000, ICE is an electronic exchange that facilitates the purchase and sale of energy commodities. In 2013, ICE purchased NYSE Euronext, the parent company of the New York Stock Exchange. They are now the third largest exchange group in the world. They boast twenty-three regulated exchanges and six clearing houses around the world.
Overview of Bakkt
On August 3rd of 2018, ICE announced that they will create an open and regulated, global ecosystem for digital assets. They want to allow consumers and institutions to buy, sell, store and spend digital assets on a seamless global network.
ICE have expressed that Bakkt’s first use case will be for trading and conversion of Bitcoin versus fiat currencies, as Bitcoin is currently the most liquid cryptocurrency. Jeffrey C. Sprecher, the CEO of the Intercontinental Exchange has stated:
“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.”
ICE is endeavouring to launch this initiative as early as November 2018 with a 1-day physically delivered Bitcoin contract, subject to approval.
What Bakkt will do for Crypto
The announcement of the Bakkt exchange by the ICE group is huge news for the crypto space. Institutional money coming into the cryptocurrency space is a topic that is being speculated about more frequently of late. When will it come? How will it come? What is stopping it?
To date, the influx of institutional money has been somewhat hampered by regulatory concerns. Also, the lack of ability for large institutions to easily inject funds into the crypto market has stifled any significant inflow. That sentiment is now beginning to change.
Large financial institutions like ICE are now recognising that it is a risk not to have any exposure to Bitcoin and digital assets. They will come under increasing pressure in the coming years to establish this exposure and the move to launch Bakkt is ICE’s first move towards it.
This move will also encourage crypto adoption and help people to use it in their everyday lives. ICE is even establishing a partnership with Starbucks to help consumers to convert their digital assets into US dollars for use in their stores.
The Future
By making digital assets easier to access for institutional investors and consumers alike, we could be about to see a large influx of funds into the crypto market. This could see the market capitalisation going to new highs upon the launch of these new investment vehicles. It is not only Bakkt that is venturing into these waters. The $2.4 Trillion Asset manager Fidelity also announced that they are planning to launch crypto products before the end of 2018.
ICE is setting itself up to be a frontrunner for the future of digital assets. Just as they positioned themselves in 2000 as an electronic exchange to bring trading and settlement into the digital age, they are now staking their claim for Bitcoin and digital assets.
Tagged with: bakkt, bitcoin, blockchain, crypto, exchange
Originally published at cryptosuss.com on September 24, 2018.
