Bakkt Opens Its Doors For Institutional Investors To Access Bitcoin Custody Offerings

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Bakkt says its Mission is to “bring digital assets into the mainstream” Bakkt, the cryptocurrency ecosystem created by Intercontinental Exchange (ICE) is primarily meant to facilitate mainstream adoption, according an update on the Bakkt Twitter page. This according to the update will be achieved by enabling transaction efficiency between consumers and merchants. The cryptocurrency platform launch which was scheduled for January 24 has been postponed due to legal and regulatory reasons. Prior to the recent postponement, the launch had been postponed twice last year, the last schedule being for December 12 2018. Majorly, the delay of the launch is due to the US Government shutdown which failed. Since the launch must be approved by the Commodity Futures Trading Commission (CFTC), it cannot go on until the government systems are back in shape. The launch has been postponed to April 2019 although no precise date has been given. A chinese billionaire by the name of Li had invested in the project in anticipation of the launch, completing the projects first funding round. By the end of 2018, Bakkt had raised up to $180 million. Apart from Li, Bakkt also vrough in institutional investors such as Boston Consulting Group, Microsoft’s venture capital arm M12 and Naspers’ fintech firm. Confirming this, Bakkt CEO Kelly Leoffler said: “Clearing firms and customers have continued to join us as we work toward CFTC approval. We made great progress in December, and we’ll continue to onboard customers as we await the ‘green light’.” The incessant postponements are of concern not just to the cryptocurrency industry but also to ICE as Bakkt was supposed to launch as a new territory for ICE at a time when a formidable competitor, the new exchange MEMX is coming into the futures market, largely to overturn ICE. For the cryptocurrency industry, Bakkt is supposed to encourage mainstream adoption which is expected to drive institutional investors to the industry. With the postponement however, the industry will have to wait until the government gives its approval. The cryptocurrency market had started improving just few days ago but with the recent postponement, there is another dip that just started today. Among the top ten cryptocurrencies, only EOS is in green at the time of writing this article. Bakkt launch will certainly promote the cryptocurrency industry as it also intends to “build the first integrated, institutional grade exchange-traded markets and custody solution for physical delivery of digital assets”, as tweeted earlier today. Will the delay worsen the market condition before it is finally done?
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The Intercontinental Exchange (ICE)-owned Bakkt Bitcoin futures contracts platform, has announced that it will begin to offer Bitcoin custody services to all interested institutions. Before now, the Bakkt Warehouse was only available to entities who were interested in trading futures contracts.

In an official blog post written by Bakkt Chief Operating Officer (COO) Adam White, the platform has received a regulatory nod from the New York Department of Financial Services (NYDFS) and will allow all institutions to access Bitcoin custody, giving all of its clients the ability to “safeguard their assets using Bakkt’s enterprise-grade offering.”

In addition, Bakkt has announced that Pantera Capital, Tagomi, and Galaxy Digital, have already signed up for Bitcoin custody. Apart from these three, however, Bakkt reveals that there will be more firms announced in the weeks to come.

White further suggests as part of the announcement, that Bakkt is the preferred platform for custody because the feature requires several safety nets to properly work, all of which the platform has.

 “Safely storing digital assets demands a comprehensive approach to custody. Institutions and sophisticated investors need more than cutting-edge technology. They require proven infrastructure, robust operational controls, and independent oversight.”

The platform boasts of advanced security and accessibility for both futures contracts and custody offerings as well. Mentioning “enterprise-grade infrastructure’, White states that Bakkt employs facilities that provide redundancy and can easily support heavy workloads and immediate disaster discovery.

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To further ensure the security and availability of funds, Bakkt also has biometrically-controlled bank-grade vaults as well. White also tries to convince prospective customers, of the company’s other methods to ensure safety and transparency such as a $125 million insurance policy as well as third party audit and examination committees.

According to a Bakkt Volume Bot (@BakktBot), the platform hit a new all-time high on Friday, after trading 1741 contracts, worth about $15.5 million. Bakkt also recently revealed plans to launch an app in 2020, that will allow both merchants and customers, transact business via crypto, with Starbucks as the first partner.

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