The formation of Bakkt is the most exciting piece of cryptocurrency news I’ve heard in a long, long time. Not only will this serve as an institutional trading platform to usher in family offices, hedge funds, and other institutional investors— it will also increase adoption of blockchain amongst retail investors, with a user a friendly platform and trust established through the credible names involved.
What is Bakkt?
The owner of the New York Stock Exchange (NYSE) recently announced that he’s working on a federally regulated marketplace for digital assets such as cryptocurrencies. The exchange, called Bakkt, will aim to be a globally regulated ecosystem for digital assets. To add to the excitement, they’re launching Bakkt in partnership with companies such as Microsoft, Starbucks, and the Boston Consulting Group.
Microsoft is contributing to the project through Azure, their cloud computing solution, and are backing it technologically. While on the retail side, Starbucks is going to be the flagship retailer, allowing customers to convert cryptocurrency and other digital assets to U.S. dollars in Starbucks stores. Curious about what other digital assets Bakkt might decide to include? Think about reward points, which are in a way cryptocurrencies themselves, they just exist in a closed loop I.e. once you convert to Starbucks points, you can’t convert back to your base currency. Through Bakkt, and its partnerships with companies like Starbucks, we will have a digital asset exchange that allows us to trade rewards points, cryptocurrencies, and tokenized assets (amongst many more).
This is both important and incredibly exciting for the cryptocurrency market. As we’ve learned, much of what holds institutional investors back from entering the space is a lack of infrastructure. They aren’t willing to compromise the security or efficiency they have in traditional markets in order to trade a shiny new Bitcoin. Most exchanges also lack the liquidity required for a pool of institutional investors to partake, there simply isn’t enough trading volume for their orders to be filled. While the precise solution hasn’t been discussed, Bakkt claims that it will increase liquidity as part of its efforts to spur adoption of cryptocurrency amongst institutions and retail investors. Bakkt will also reduce volatility within its platform by allowing cryptocurrency investors to hedge against it
Short Bio of the Author – Reza Jafery
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