If you are following the bitcoin landscape carefully, you know how far we have come in terms of both its popularity and usability. After all, we all witnessed how Bitcoin prices soared to an all-time high of $19k. However, we are still far away from mass adoption as the bitcoin prices don’t reflect its usability when it comes to mass adoption.
Meet Bakkt, a new company that aims to bring bitcoin and other digital assets to the mainstream. It was created by the owner of the New York Stock Exchange(NYSE), and can open up access to Bitcoin and other digital assets to more institutional investors. Their main aim is to make digital assets more trustable, accessible and liquid. In short, they are building a consistent regulatory construct. This will mean that they will develop both a pre and post-trade infrastructure at an institutional level with efficient price discovery.
Why do we need Bakkt?
Bakkt is not the first company who is trying to achieve an exchange-traded fund (ETFs). Gemini owned by Winklevoss brothers also tried the same thing, only to get rejected by SEC.
Bakkt seems to be on the right path as they have already solved two issues that the SEC laid out. The two issues that we’re talking about are the lack of trust price formation and reliance on futures derivatives and market.
Apart from providing institutional investors to buy digital assets, it also aims to solve other problems. Let’s discuss them briefly below.
1. Providing infrastructure for launching new products
Bakkt aims to solve the problems that new blockchain product goes through. They will bypass all the stringent requirement for resources, learning, budgets and so on by using the existing futures market. This means that it will be regulated and provide the backbone required for Bitcoin or other digital currencies to succeed.
2. Security standards that works
Bitcoin is reasonably secure as it is decentralized, but it still lacks the security at institutional standards. This means providing the infrastructure, integrity, resilience, etc. as part of the ecosystem. The security standard should provide end-to-end protection starting from warehousing to financial security side.
Bakkt has also partnered with two major companies which include Starbucks and Microsoft. The role of Starbucks is seen as a catalyst in the whole process of digital currency adoption. During the partnership, Starbucks showed their interest in enabling customers to use digital currency to buy their goods. Maria Smith, the president, looking after the partnership adds that the role of Starbucks is vital and pivotal, and will ensure that consumers get a better and regulated way of spending their digital currency.
The role of Microsoft, on the other hand, is seen more on the deployment side. Microsoft can lend their Azure cloud business to Bakkt systems which in return helps enable merchants to embrace bitcoin payments quickly. They will be in charge of the backend stuff including e-Commerce, invoice handling, and so on. In short, Microsoft’s cloud services will play a crucial role in powering the Bakkt solution and empowering consumers to sell, buy or store digital currencies.
Microsoft inclusion in the project also means that it will make easy for merchants to include digital payments option in their service. Merchant’s adoption will act as a catalyst and improve customers adoption.
Apart from Microsoft and Starbucks, there are other key investors include Pantera Capital, Galaxy Digital, and Horizons Ventures.
That’s not all as Adam White, one of the core members of the Coinbase, has also joined Baktt. He is the guy who looked after the GDAX exchange and built it. His role in Bakkt is to serve as a COO and ensure that it reaches new heights.
Physical Bitcoin Futures
Bakkt is a promising project and will be the first platform which will make physical Bitcoin futures accessible to the investors.
The company wrote on Twitter, “Our first contracts will be physically delivered Bitcoin futures contracts versus fiat currencies, including USD, GBP and EUR.”
Right now, Bakkt is capturing a lot of media attention. So, what do you think about them? Do you think they will bring bitcoin mass adoption? Comment below and let me know.