Cryptocurrency enthusiasts and companies in the space have been waiting for institutional investors to enter the crypto market. In 2018, as virtual currencies entered a bear trend, crypto supporters were waiting for institutions to help recover the price of virtual currencies. Nonetheless, this did not happen. Bakkt aims at introducing Bitcoin (BTC) futures backed by the underlying asset. This could help the market receive an influx of new investors.
Bakkt Could Help Institutions Enter the Crypto Market
After months of waiting, Bakkt could be helping institutions enter the virtual currency market. Large companies and traditional investors did not have the possibility to deal with Bitcoin and other digital assets due to the lack of infrastructure. In general, the space was built from the ground up for retail investors, and institutions remained on the sidelines.
The Intercontinental Exchange (ICE) is the parent company of the New York Stock Exchange (NYSE) and the one that is going to be launching Bakkt as soon as this year. Although the platform has been postponed on several occasions, the firm could have the approval to operate in the near future.
The CEO of Bakkt, Kelly Loeffler, commented about the launching date of this platform:
“While we’re not yet able to provide a launch date, we’re making solid progress bringing the first physical delivery price discovery contracts for Bitcoin to the U.S.”
Bakkt is currently being backed by Microsoft and Starbucks, two companies that could be eventually benefited with the implementation of blockchain technology and virtual currencies. Bakkt’s goal is to build the first institutional-grade exchange-traded markets and also offer custody solutions for digital assets.
At the moment, the Chicago Mercantile Exchange (CME) is offering cash-settled Bitcoin futures contracts. The Chicago Board Options Exchange (CBOE) offered these services for over a year but it decided to stop working with it. Meanwhile, Bakkt’s Bitcoin futures contracts are going to be the first physically-settled derivatives.
At the same time, Bakkt’s launching could help a Bitcoin Exchange-Traded Fund (ETF) receive the approval from the U.S. Securities and Exchange Commission (SEC). In the past, many ETFs have been rejected and the agency remains sceptical about them. Bakkt will be very positive for the market since its trading volumes may help solve some of the concerns that the SEC and other institutions had about the market. With a larger trading volume in futures contracts, liquidity increases and the chances of the SEC approving a Bitcoin ETF grow as well.