Despite recent tumbling prices and a mild recovery in the crypto space, optimism is growing over major projects that plan to go live in 2019. One of the major programs will be Bakkt. Its platform “will allow institutional customers to perform various operations with digital assets as part of a seamless global network”.
The mastermind behind Bakkt is none other than Jeff Sprecher, head of the Intercontinental Exchange (ICE), the world’s premier stock exchange operator. Sprecher’s spouse, Kelly Loeffler, will be the project’s CEO. She is currently the head of ICE’s digital assets department. Bakkt will immediately bring to the effort an assortment of “Big Players” in the field of emerging consumer Fintech, like BCG, Starbucks, and Microsoft. The primary goal is to form an accessible ecosystem, capable of supporting the growing needs of the digital assets market and institutional investors.”
Crypto enthusiasts have always longed for the credibility and investment capital that institutional investors would bring to the cryptocurrency world, but these traders are reticent to join in without a number of traditional safeguards. Jay Clayton, the head of the SEC, has mentioned several of these same concerns in his pronouncements, namely secure custodial services, monitoring software to identify potential cases of price manipulation, and improved security protocols to prevent incidences of fraud.
The crypto ecosystem, primarily exchanges, needs to mature to a higher level. Regulatory oversight would help to remedy the situation, but a quicker path would entail firms like Bakkt to jump into the fray with a modern set of effective clearinghouse tools already operational. ICE, the parent of the New York Stock Exchange (NYSE), intends to provide this piece of the puzzle, hopefully, beginning in late January. There have already been delays, but no one wants this project to stumble out of the gate.
The initial phase of the project will focus on Bitcoin trading and exchange transactions, since Bitcoin offers the greatest liquidity of all cryptos in the market. Bakkt will also integrate consumer and institutional applications in a seamless, regulated manner, thereby providing the transparency and trust expected by both groups. Bitcoin futures with custodian services will also be part of the first phase of operations, subject to the approval of the Commodity Futures Trading Commission (CFTC).
The investors behind Bakkt include Fortress Investment Group, Eagle Seven, Galaxy Digital, Horizons Ventures, Pantera Capital, Protocol Ventures, Susquehanna International Group, LLP, as well as British billionaire and hedge fund manager Alan Howard. With this group’s participation, along with the cooperation of the corporate giants noted above, supporters believe that this project is “capable of engineering a global revolution in the field of digital assets and cryptocurrency technologies”.
The strengths of the ICE organization are also without compare. With over $4.6 billion in annual revenues, it can provide financial stability and a powerful trading infrastructure to ensure that Bakkt is successful. ICE is already the operator of many global stock exchanges and data services, has been in business since 2000, and is known for its wide range of products and services in global financial markets through exchanges, clearing houses and information services.
ICE will lead the way in 2019, along with the likes of Fidelity Investments, which is launching its own digital custodial and crypto trading services. The NASDAQ is also cooperating with industry participants to speed up the adoption of enhanced security and monitoring protocols. If all comes together as planned, then supporters may have created the special formula to jumpstart crypto adoption into the mainstream and to put it firmly back on the fast track, as many have predicted for 2019 and 2020.