Bakkt is becoming more well known within the nascent Crypto Industry. But for
What is Bakkt – Bakkt is expected to be a giant in the cryptocurrency exchange world. It is slated to be the regulated equivalent of Binance. It hasn’t even launched yet, but with all the hype around it I believe that it is the only crypto exchange that might stand a chance at rivalling Binance.
Bakkt, Bringing Trust and Utility to Digital Assets
Bakkt was originally scheduled to launch in November 2018, then pushed to December 2018 but then experienced a delay until the end of January 2019, followed by another delay. Since the three delays, Bakkt has refrained from giving any further date or anticipated deadline. Of note, the delays were due to government regulatory issues, not an issue with Bakkt being unready to launch.
Due to regulatory delays, I wouldn’t anticipate Bakkt launching until Q4 2019.
Bakkt is a multipurpose platform that focusses on a few key areas:
- Act as a crypto exchange to buy, sell and store digital assets
- Trade cryptocurrencies such as BTC, ETH, LTC, BCH
- Bitcoin futures, physically settled
- A software to utilize digital assets in commerce (i.e. a payment software) to rival the services of Visa and Mastercard
- Custody of digital assets in a safe and trusted manner
- Follow regulation – Bakkt will enforce AML/KYC and follow all legal regulatory frameworks to be in compliance with legacy financial and sovereign government authority
Our mission is to build the first integrated, institutional grade exchange-traded markets and custody solution for physical delivery of digital assets. In parallel, we’re building a secure, scalable platform for transacting with digital assets so that our regulated ecosystem serves consumers, merchants and institutions.Kelly Loeffler, CEO Bakkt, in a Medium Post
Bakkt’s reported vision is to bring digital assets into the mainstream by enabling efficient transactions between consumers and merchants.
Bakkt, Bringing Legacy Financial Institutions into the Digital Asset Arena
Bakkt has stated that building a trading platform and futures contract infrastructure is not enough. Crypto needs adoption. Hence their initiative to develop a payment software for merchants and consumers. This allows users to pay for goods and/or services in crypto and for merchants to convert the crypto to fiat, if they prefer not to accept crypto fully.
This allows everyday non-crypto companies such as Amazon, Grocery stores, Malls, coffee shops, etc to accept crypto as payment and either keep the crypto or have it immediately converted to USD. Once they get a taste for crypto, they are likely to explore it further.
Moreover, Bakkt, being founded by ICE and associated with Wall Street/NYSE, brings a level of trust to old school legacy financial firms and companies. They are more likely to interact with Bakkt than with
Bakkt is owned in partnership by ICE, Starbucks and Microsoft, with many other investors as well. ICE is the Intercontinental Exchange, which is also the parent company of the NYSE (New York Stock Exchange), one of the world’s largest stock exchanges. That would make the Bakkt exchange like a brother to the NYSE.
Microsoft’s involvement in Bakkt extends to using its cloud solutions to enable consumers to trade, store and spend cryptocurrencies on a global network. Although I am not too sure why they do not integrate with a
Starbucks earned a partnership stake in Bakkt without a capital investment, but rather through supporting purchases of Starbucks products with Bitcoin (and likely other cryptos later). Starbucks has ~25 million customers every week, and plans on advertising and accepting Bitcoin as a method of payment (through the Bakkt payment app). However, Starbucks will immediately be converting the BTC into USD through the Bakkt platform.
Being able to reach 25 million potential customers each week is astounding and mind boggling. That would be a significant increase in the exposure/number of people in crypto as the crypto industry is still quite tiny.
Other investors in Bakkt include:
- Galaxy Digital
- Horizons Ventures
- Pantera Capital
- Fortress Investment Group
- Eagle Seven
- Alan Howard
Bakkt Valuation – $740 million USD!
Last year Bakkt raised $180 million USD in a funding round, estimating its valuation at $740 million USD. That is a whopping valuation for a company that hasn’t even launched its product yet, not to mention has zero dollars in revenue and zero in profit.
Considering that their earnings will primarily be on low trading fees, they must be expecting high trading volumes.
If we presume that corporations and venture capitalist firms investing in Bakkt have some insider information, then I think that the $740 million USD valuation of Bakkt is certainly a bullish sign. If it isn’t bullish, then the market hype from 2017 has not died down entirely. But I think it is a positive bullish sign overall.
The high valuation of Bakkt by Wall Street investors is an indication that Wall Street wants Bakkt, and by extension crypto, to do very well.
Markshire Crypto Conclusion
I just wanted to start with I find it odd that the Bakkt slogan “bringing trust and utility to digital assets” is highly ironic. A legacy financial institution, long mistrusted as Wall Street money-mongers claim to bring trust to digital assets, which by their very nature are designed to be trustless.
I believe the intention of the message is to bring trust to the user community so as not to rip each other off.
The involvement of giants such as ICE, Microsoft and Starbucks brings expertise, trust, experience and a level of legitimacy to the cryptocurrency industry like we have not seen before. Even bigger than the JPM coin in my opinion, since the JPM coin is its own private blockchain.
With the repeated delays in the Bakkt launch due to lack of regulatory clarity and the continued stagnation of the cryptocurrency market, I anticipate that the eventual Bakkt launch will occur much later, late 2019, possibly even 2020.
The launch of Bakkt will come without much change in the market, and slowly take the world by surprise as it gains volume and spreads adoption via Starbucks. In other words, I believe that Bakkt will be a contributing factor to the next bull run by bringing in a legacy institution and allowing “old money” to meet digital assets halfway.
Furthermore, the fact that Bakkt will act as a custodial service is another sign that it bridges the old and the new. Acting as a custodian is a great way to help ensure that the crypto does not get lost. However, it also is an anti-crypto move. Not your keys, not your crypto. That is a tenant of crypto that will always be true.
With all of the money invested into Bakkt and the high valuation that it has received, I can only imagine the profits that it anticipates to pull in. A giant like Bakkt (aka ICE, Starbucks and Microsoft) will pour millions into advertising and raising awareness and usage of its product. Combine their efforts with that of other regulated exchanges coming online (ErisX, Fidelity Digital Assets, Gemini, CoinBase, etc) and you have a storm of support and advertising.
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