Intercontinental Exchange’s bitcoin/ cryptocurrency futures trading platform Bakkt delayed its launch to January 24th,2019. It was earlier set to launch on 12th December 2018.
Given the volume of interest in Bakkt and work required to get all of the pieces in place, we will now be targeting January 24, 2019 for our launch to ensure that our participants are ready to trade on Day 1
Bakkt is a marketplace that will allow people to buy, sell, trade, and use cryptocurrency.
At first, it will offer traditional investment vehicles and investment services. This will enable institutions and investors a place to “safely” transact with clear rules, regulations, and expectations. For example, if one wants to speculate on cryptocurrency prices without buying cryptocurrency, Bakkt will offer futures contracts and probably index funds.
Eventually, it will offer merchant solutions like payment apps, credit cards, and point-of-sale services that use cryptocurrency to settle transactions at far lower costs than traditional payment networks like PayPal or Visa. It will also connect merchants with people who want to use cryptocurrency to transact.
It’s built on the Microsoft Azure platform and managed by the Intercontinental Exchange (ICE), the same entity that runs the New York Stock Market. As such, anybody who uses Bakkt will have a full suite of enterprise-grade traditional investment products and services, as well as tools that large investors need to properly manage funds.
Bakkt’s influence on Bitcoin’s price
Earlier people were optimistic that with Bakkt’s launch the bull run will arrive in Late December. But after the delay in its launch, it is pretty sure that the bulls will have to rest aside till the beginning of next year.
Bakkt is a playground for institutional investors. The only direct impact of Bakkt will be taking bitcoin out of circulation, reducing the supply available for purchase. It’s first product, bitcoin futures, should not on its own create pressure for prices to go up, though it may improve liquidity for the market.
Secondary impact on the Market
Bakkt’s true value comes down the line, in the form of secondary benefits that may be more powerful than it’s direct impact. It will lead to professional investors talking about (i.e., hyping) cryptocurrency and give huge investment institutions a safe place to buy, sell, and hold cryptocurrency on behalf of their clients, which will bring a lot of new money into the cryptocurrency markets.
In other words, “skin in the game” from people with deep pockets and an interest in seeing cryptocurrency succeed.
Bakkt will create more demand for Bitcoin, pushing Adoption
The biggest direct impact of Bakkt will come later, once it rolls out merchant solutions that allow people to buy/sell things in local currency using cryptocurrency to settle the transactions. If Bakkt succeeds in this effort, it will drive prices and usage of cryptocurrency much higher. Not from investors dabbling in the markets and big institutions storing large amounts of crypto in Bakkt’s vault, but from actual usage of cryptocurrency in a real-world environment.
Bakkt says it plans to do this at some point, and it’s the only reason Starbucks is involved in the venture. Basically, Bakkt will handle the crypto while a Bakkt app or card converts the crypto in/out of cash.
Assuming Bakkt uses bitcoin to settle transactions, it will need to hold bitcoin—at least as much bitcoin as needed to cover all transactions it processes at any one time, but probably a lot more as a cushion. Therefore as more people use Bakkt products, Bakkt will have to hold more bitcoin, creating more demand for bitcoin, pushing the price of bitcoin higher. Likewise for whatever cryptocurrency they support.
The value of Bakkt is its ecosystem, which will be regulated by the U.S. Government and offer the simplicity and familiarity of conventional investing. If it gets received well, it could be to cryptocurrency what AOL was to the internet.