Bakkt, the cryptocurrency exchange from the stables of Intercontinental Exchange (ICE), which is the parent firm of the New York Stock Exchange (NYSE), has explained its intended mode of operation to prospective clients in a Medium blog post on August 20, 2018.
Bakkt for Wider Adoption of Cryptoassets
On August 3, 2018, Intercontinental Exchange – a leader in the global financial and commodity markets, announced the launch of Bakkt crypto exchange, in collaboration with Starbucks and computer giant Microsoft, in a bid to establish a transparent and regulated global ecosystem for digital assets.
Fast forward to August 20, 2018, the CEO of Bakkt, Kelly Loeffler has clearly outlined the mode of operation of the exchange and what clients stand to gain.
Loeffler explained that the Bakkt exchange is open to both institutional investors or investment managers looking for “federally regulated, institutional cryptocurrency trading and security solutions” as well as ordinary investors interested in getting a vast array of choices in their crypto transactions.
The chief executive also stated categorically that Bakkt’s primary objective is to aim for wider adoption and integration of digital assets.
Starting with a Proven Framework
The top official revealed that since the launch of the platform two weeks ago, they have been receiving positive feedback from the cryptoverse with many people yearning for a “trusted system for trading, storing and spending cryptos.”
Loeffler added that Bakkt is primed to satisfy the needs of clients by “starting with a tested and trusted framework that successful exchanges employ, including putting in place a “consistent regulatory construct, transparent, efficient price discovery, and an institutional quality pre- and post-trade infrastructure.”
No Margin Bitcoin Trading
Importantly, Loeffler has also made it clear that since physical delivery is a vital element to price discovery, Bakkt intends to offer clients an entirely “collateralized or pre-funded” system for buying and selling bitcoin, adding that the platform’s daily bitcoin contract “will not be traded on margin, use leverage, or serve to create a paper claim on a real asset.”
The Bakkt team firmly believes that by taking such an approach, it would differentiate itself from existing bitcoin futures contracts and cryptocurrency exchanges which offer clients margin trading, leverage, and cash settlement.
Bitcoin Adoption Slowly on the Rise
While cryptocurrencies keep getting criticized by some in the traditional finance sector for their extreme volatility, it’s worth noting that the interest of forward-thinking institutional investors in the nascent digital asset space is slowly on the rise.
In July, reports emerged that the world’s largest asset management firm BlackRock, with $6.3 trillion under management has started making concrete plans to venture into the cryptospace.