The Bakkt trading platform will be going live on January 24, 2019, according to recent media reports. The platform was developed with support from The Intercontinental Exchange (ICE), who operates the New York Stock Exchange (NYSE), as well as 22 other major global exchanges.
A Medium post informed the public that they would be “targeting” January 24th as the launch date, though they didn’t say for certain that Bakkt would go online. This news comes at a trying time for digital assets, which have been under severe selling pressure all week.
The value of the entire crypto sector has fallen well below $200 billion USD, and many of the major cryptos are trading at price levels that haven’t been seen since last year. ICE’s commitment to launch Bakkt appears to be a vote of confidence in cryptos, and a sign that digital currencies could attract investors in the medium-term.
Read: What is Bakkt?
Bakkt is Getting Ready for Business
Bakkt CEO Kelly Loeffler said via the Medium post that, “given the volume of interest in Bakkt and work required to get all of the pieces in place,” they have chosen the date in January to, “ensure that our participants are ready to trade on Day 1.”
Ms. Loeffler went on to say that Bakkt is working with the US Commodity Futures Trading Commission (CFTC) in order to ensure that the, “Bakkt™ Bitcoin Daily Futures contract and the Bakkt Warehouse,” meet regulatory requirements, and that, “These products represent a critical shift in the evolution of crypto markets toward more accessible, useful, and regulated instruments.”
Bakkt will be offering Bitcoin cold storage for their clients, which may be one of the most secure ways to hold cryptos.
Unlike software wallets, the private keys are stored in a computer that isn’t connected to the internet, so stealing them is pretty tough. Bakkt won’t be the first firm to offer a cold storage service. They are connected to (controlled by) ICE, which may attract a new kind of client that other crypto storage companies couldn’t.
Physically Settled BTC Futures!
Bakkt recently announced they would be offering physical settlement of their Bakkt Bitcoin (USD) Daily Futures Contracts, and that the contracts had satisfied regulatory requirements. They will be settled by ICE Clear U.S., which will add a lot of credibility to the product.
Physically settled BTC contracts contrast the current futures contracts that are traded on the Chicago Mercantile Exchange (CME), which are settled in cash. Instead of receiving BTC when a contract expires, the buyer will receive cash if the contract gained in value.
The Federal Reserve cited the introduction of the CME contracts as a contributing factor in the decline of bitcoin prices, but there is no actual connection between bitcoins and the CME contract. This suggests that the effect is wholly psychological and somewhat tenuous.
Where is the Bottom?
Bakkt is one of a few new trading platforms for cryptos.
Despite the growing public knowledge of cryptos and how they function, the price floor seems to have evaporated. Bitcoin prices are often used to gauge the health of the entire crypto sector, and if that is the case, cryptos may have a rough 2019 waiting for them.
The real issue today is that there is no fundamental value for most cryptos. Major banks and other corporations are using the more popular blockchains, like Ethereum, but they don’t need the crypto in any sufficient quantity.
Crypto prices aren’t likely to enter a prolonged period of gains until people hold them as a store of value. Today they are still somewhat speculative in nature, which doesn’t bode well for their value over the next few months. Over the longer-term, exchange platforms like Bakkt are in a great position to thrive!