In late 2018, a new Bitcoin futures market was announced by Intercontinental Exchange(ICE) and New York Stock Exchange called Bakkt. It will use Microsoft servers to manage digital assets. Boston Consulting Group (BCG), Microsoft, Starbucks, and many other large names were announced to be working with Bakkt to create a software platform. The Bakkt ecosystem is expected to include federally regulated markets. Bakkt is going to be trading and conversion of Bitcoin (BTC) versus fiat currencies.
Recently volume for Bakkt started to pick up, it took a month for it to start moving as on 8 November 2019 its volume hit record $15.6 Million which equals 1,756 BTC. As other regulated features products like CME fail to grab a foothold and are constantly slipping whereas Bakkt seems to be growing continuously but the Larger CME still dwarfs the much smaller Bakkt as CME is 12 times bigger. Future for CME doesn’t look good as they are held responsible for the Bitcoin price crash by some experts, on the other hand, Bakkt has come out as a savior.
But, Is Bakkt what was needed? People’s concerns grew more and more as its release gets delayed again and again and people speculate that contracts instead of being the Bitcoin settled future may be cash-settled futures. Also as governments don’t let the competitors of their own currency bloom without a long drawn out battle people doubted its future ICE assured that the contracts were physically-backed and settled and in August it was cleared to launch. As Kelly Loffler, owner of New York stock exchange said,
Our contracts have already received the green light from the CFTC.
With approval from the New York Department of Financial Services to create Bakkt Trust Company, a qualified custodian, the Bakkt Warehouse will custody bitcoin for physically delivered futures
It all looks good but experts speculate that The ICE and NYSE will try to keep the BTC artificially low against the dollar with futures and that it is just another product to keep the dollar dominant and the evidence seems to favor them. Recently Bakkt purchased Digital Asset Custody Co Inc.a company specially created for the purpose of custody by LabCoNYC and then sold to Bakkt (with its VP still being a partner at LabCoNYC) which seemed shady because why would you create an independent warehouse which you own tied to delivery and not act like other futuristic products that do physical delivery where the third party has the commodity like gold vaults . As this is a new avenue this might prove as a synergy between stock and commodity where BTC is held like a Stock Certificate but the method of withdrawing BTC hasn’t made clear yet and the Bitcoin might end up being hostage in the warehouse.
As its launch date approaches, Only time will tell whether Bakkt will end up being a revolution in the Cryptocurrency world or as a pawn to Wall Street.