A couple of weeks ago, the New York Stock Exchange (NYSE) and the Intercontinental Exchange (ICE) teamed up to announce Bakkt. The digital asset platform is aimed to regulate the cryptocurrency market and is backed by prime companies such as Starbucks, BCG, and Microsoft. According to Bakkt’s CEO, the platform aims to facilitate institutional investment by providing the much-needed infrastructure for it and won’t support margin trading.
Yesterday, Kelly Loeffler, Bakkt’s CEO, described the key features that the platform aims to achieve – a transparent and efficient price discovery, an infrastructure for institutional investments, and a consistent regulatory construct. She adds that due to physical delivery, Bakkt stands apart from the existing cryptocurrency exchange platforms. Notably, the buying and selling of bitcoin will be fully collateralized or pre-funded.
With our solution the buying and selling of bitcoin is fully collateralized or pre-funded.
Our new daily bitcoin contract will not be traded on margin, use leverage or serve to create a paper claim on a real asset.
— Bakkt (@Bakkt) August 20, 2018
The main focus of the platform is to bring about a consistent regulatory construct, an institutional quality pre- and post-trade infrastructure and an transparent, efficient price discovery. Simply put, Bitcoin tokens will not be traded like Bitcoin futures available on the market today. Loeffler explains:
“Specifically, with our solution, the buying and selling of Bitcoin is fully collateralized or pre-funded,” She adds “As such, our new daily Bitcoin contract will not be traded on margin, use leverage, or serve to create a paper claim on a real asset. This supports market integrity and differentiates our effort from existing futures and crypto exchanges which allow for margin, leverage and cash settlement.”
Bakkt Sounds Promising
Bakkt’s CEO just confirmed in her publication, what the industry experts were hoping and expecting from the platform. Fundstrat’s Tom Lee elaborated a few important differences between existing solutions like Coinbase and Binance and Bakkt, earlier this month.
Other experts have also joined in to emphasize the tremendous importance of physically-settled bitcoin futures. Garret See of the DV Chain investment firm believes that this would facilitate better arbitrage trades and it would make trading a lot less risky. Bakkt’s digital asset platform is set to begin functioning in November.
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