Institutional trading platform Bakkt has been a long time coming; it had been threatening to launch for over a year while it ironed out the regulatory kinks. Now, a few days before its September 23 physical Bitcoin futures launch, optimistic cryptocurrency predictor Tom Lee has said this could be a turning point.
Institutional confidence in Bitcoin is undoubtedly on the rise; however, there is still some skepticism from some of the top brass. Recently, SEC Chairman Jay Clayton commentated that the digital currency is miles away from making it onto something like NASDAQ, but Bakkt may be the baby steps.
Bakkt, a subsidiary of the Intercontinental Exchange, is looking to be bridging the gap between the cryptocurrency space, and the traditional, institutional, investment arena. This is not the first time there has been some crossover, with CBOE and CME pioneering Bitcoin futures as far back as 2017, but Bakkt has pushed it to the extremes on both ends.
One one side, they have been working to acquire full regulatory compliance, announcing their launch with the news that they had received a New York state trust charter, through the New York State Department of Financial Services. Additionally, their Bitcoin futures are physical ones, meaning that the investors have control and ownership of their coins – a big step for the usually crypto-shy institutional investors.
It is this new offering that Lee is pinning a lot of optimism now, regardless of the lackluster performance of Bitcoin since the deposits opened for the futures exchange.
“I am very positive on Bakkt and its ability to improve trust with institutions to crypto,” Lee Tweeted alongside a graph of Bitcoin’s recent small recovery in price ahead of the Monday Launch.
Lee may be onto something with regards to making Bitcoin more traditional investor-friendly. Recently, CME also reported that they had applied to increase in the so-called spot month position limit for its Bitcoin futures contracts in a letter to the U.S. Commodity Futures Trading Commission.
Demand was the reasoning behind this push, but that demand has been brewing for a few years now. On the other hand, VanEck, who launched a limited Bitcoin ETF offering aimed solely at institutional investors, seemed to get off to a muted start with only 4 BTC being traded.
It appears that the institutional dam wall of money that many think is cracking before the Bitcoin market is a little more complicated and dynamic than that. Futures may be the start, and limited ETFs not the answer; but for a true ETF and Bitcoin to be seen on NASDAQ, there is a long way still to go.