Bakkt is an upcoming trading platform that will offer a specific type of investment called Bitcoin futures contracts. Experts predict that Bakkt will be Bitcoin’s big break into institutional finance―in fact, Bakkt may even appeal to Wall Street investors. Here’s why Bakkt is so important.
What Is Bakkt?
Bakkt is a platform that offers Bitcoin futures, which are contracts that oblige an investor to buy or sell an asset at a certain time and price. This means that Bakkt is quite different from regular exchanges, which simply buy and sell cryptocurrency on the spot. Futures are widely used in mainstream finance, which means that Bakkt will probably be of interest to traditional investors.
Bakkt is also highly anticipated due to the fact that it is being developed by the Intercontinental Exchange, the company that operates the New York Stock Exchange. This means that the creators of Bakkt have plenty of prestige, which could allow Bakkt to attract the attention of Wall Street―something that Bitcoin is unlikely to accomplish on its own.
Although some exchanges already offer Bitcoin futures contracts, those exchanges generally settle their contracts with cash. By contrast, Bakkt will pay out its futures contracts with Bitcoin, which will otherwise be stored in Bakkt’s digital asset warehouse. This basically means that Bakkt, unlike its competitors, will be tightly integrated with the real crypto market.
For the most part, Bakkt will be targeted at institutional investors. However, Bakkt could have a noticeable impact on Bitcoin’s general market value. Because Bakkt will increase demand for Bitcoin, it could drive up Bitcoin’s price as well. This is a good thing if you already own Bitcoin—even if you don’t use Bakkt itself.
It is possible that Bakkt will grow beyond its initial investment applications. Bakkt is also meant to become a global asset network, and it may eventually find a place in retail and commerce. Bakkt is already working with Starbucks, and this partnership will allow consumers to convert their Bitcoin to U.S. Dollars, which can be spent at the chain of coffee shops.
Bakkt’s launch date is still uncertain. The platform has already experienced several regulatory delays, partly due to Bakkt’s innovative nature. However, the government shutdowns that took place earlier this year have caused delays as well. Although Bakkt has not been given a definite launch date, most expect it to go live in the next several months.
Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.