Bakkt launched its physically-delivered bitcoin futures platform on Sunday night but any hopes of fireworks were soon crashed. Its first-day performance was dismal as the market welcomed the new institutional trading platform with a further price drop. You see, compared to day one performance of cash-settled bitcoin futures launched by Chicago Mercantile Exchange (CME) in December 2017, the outcome yesterday was 75 times lower.
While many still believe Bakkt’s foray into the cryptocurrency industry is a critical turning point for bitcoin adoption, analysts at CNBC’s Fast Money have a different opinion. Nonetheless, they affirmed that Bakkt’s entry will be crucial for the growth and viability of cryptocurrencies in the future.
Bakkt Is Not A Panacea For Bitcoin Adoption
If there’s a valuable lesson to be derived from Bakkt’s trading volume yesterday, it’s the cryptocurrency community still has a penchant for overblown expectations. It’s hard to explain what was in institutional investors’ minds yesterday as Bakkt finally launched its anticipated platform. But considering that the platform is dealing with a virtual currency known for its volatility, it’s no wonder investors are playing wait-and-see.
Per CNBC analysts, Bakkt is not bitcoin’s panacea. Yet, it has a lot of advantages for the asset class. Brian Kelly, CEO of digital currency investment firm BKCM and CNBC Fast Money host opined that institutional-grade products, in this case, Bakkt, will alleviate volatility in the bitcoin market. Perhaps this will then drive adoption.
The director of institutional sales at Stuart Frankel and Co., Steve Grasso, was just as optimistic about Bakkt’s long-run impact on bitcoin. He opined that Bakkt’s platform will give institutional investors more confidence and also bring some much-needed legitimacy to bitcoin.
Bitcoin’s Viability As A Medium Of Exchange
Notably, the Fast Money panel agreed that Bakkt will bode well for the hugely-lauded hopes of institutional involvement in the bitcoin market. Brian Kelly then went ahead to point out a very important aspect of bitcoin that might have been overlooked in the recent past.
Kelly mentioned Bakkt’s collaboration with coffee behemoth Starbucks. The bitcoin aficionado stated that this partnership with Starbucks will add fuel to bitcoin’s medium of exchange narrative:
“The way that this product is structured, you can go into Starbucks with Bitcoin – they have it on their books – you can pay with BTC, they can hedge out any of the volatility, then they can have cash at the end of the day. Bakkt gets the medium of exchange [narrative] out there.”
A quick rundown of things: back in March, one of the world’s largest restaurant chains, Starbucks secured a huge equity deal in Bakkt and would accept bitcoin-based payments in return. Per reports, Starbucks will create a card and an app that will allow United States residents to seamlessly pay for products in stores.
In addition, other reports state that Bakkt is working on a crypto-centric mobile application, Bakkt pay. Not many details have been revealed about this product, but it is presumed that this application will facilitate bitcoin spending. It makes sense to assume that this application will be used by Starbucks to receive payments.
If what Kelly said is anything to go by, Bakkt’s foray into the cryptocurrency ecosystem will help bitcoin become a preferred method of making payments.
