Editor's Note: This article comes fromDeep Chain Finance (ID: deepchainvip), Author: Out of Shu, reproduced by Odaily with authorization.
Editor's Note: This article comes from
Deep Chain Finance (ID: deepchainvip)
, Author: Out of Shu, reproduced by Odaily with authorization.
On September 6, Bakkt will conduct a test of Bitcoin custody in preparation for the upcoming launch of Bitcoin daily and monthly futures on September 23.
Bakkt was once considered to be the biggest positive in 2019. The bitcoin market has been rising all the way since the beginning of the year. As Bakkt's landing time is getting closer, the bitcoin price has also begun to fluctuate in a range.
Bakkt is a futures contract exchange that is legally compliant and settled in physical bitcoins. On this track, Bakkt is more like a pioneer, opening an opening for Wall Street investors to test the waters of cryptocurrencies. To some extent, it affects the future direction of Bitcoin.
[Deep Chain Original]
Text丨Out of Shu
secondary title
The news of the Bitcoin ETF is like a story about the wolf coming, and the market conditions are gradually immune to the influence of the news of the Bitcoin ETF.
We all know that cryptocurrency exchanges are at the top of the food chain in the cryptocurrency industry. Futures contracts are a type of financial derivatives. The gameplay is simple and easy to use, so it has the widest audience.
Among all cryptocurrency exchanges, cryptocurrency futures contract exchanges are more special because they can expand leverage and have a greater impact on the market.
Just past a Bitcoin ETF, the market has ushered in the heavyweight exchange Bakkt. Since its inception, Bakkt's every move has affected the market. Its smooth landing is regarded by everyone as the biggest advantage of the currency circle in 2019.
We all know that cryptocurrency exchanges are at the top of the food chain in the cryptocurrency industry. Futures contracts are a type of financial derivatives. The gameplay is simple and easy to use, so it has the widest audience.
Among all cryptocurrency exchanges, cryptocurrency futures contract exchanges are more special because they can expand leverage and have a greater impact on the market.
Bakkt is a cryptocurrency futures contract exchange, but its difference from other exchanges is reflected in its compliance. That's one of the reasons it's considered the biggest gain of the year.
The benefits of Bakkt can be summarized as:
1. Bakkt separates liquidation, settlement, and custody, and holds the required licenses, which is highly secure and legal. And from the perspective of Bakkt's background and system, even if a safety accident occurs, it has the ability to make full compensation.
2. Bakkt's futures contracts are settled by physical delivery, which is different from US dollar settlement. This will increase market demand for bitcoin spot and reduce bitcoin's exposure to price manipulation.
4. Based on factors such as security, legality and supervision, this will provide an entrance for institutions such as Wall Street that have gathered a large amount of funds. Funds and institutions that were originally restricted by laws and regulations can invest funds in the Bitcoin market.
Of course, there is also a small group of people who think this will have a devastating impact on cryptocurrencies such as Bitcoin. Today, the total market value of the entire cryptocurrency market is less than 300 billion US dollars, which is relatively small compared to the total market value of traditional financial stock exchanges.
The amount of funds held by Wall Street's financial giants can do whatever they want in the cryptocurrency world.
secondary title
The top team formed in the dead of winter
In August 2018, Intercontinental Exchange Group (ICE) established a subsidiary called "Bakkt".
Bakkt will use Microsoft's cloud solutions to create an open and regulated global ecosystem for digital assets. Investors and institutions can seamlessly buy, sell, store and use digital assets on Bakkt.
Bakkt conducted its first round of financing in December 2018, with a financing amount of up to 182.5 million US dollars, with funds from 12 institutions and individual investors:
Boston Consulting Group, Li Ka-shing's Horizons Investments, Goldman Sachs Galaxy Digital, Microsoft Ventures M12, ICE, CMT Digital, Eagle Seven, the FinTech department of South African Press Group, Protocol Ventures, Goldfinch Partners, Alan Howard, Pantera Capital, PayU .
Bakkt was founded in the bear market of the cryptocurrency market and received financing in the coldest winter. Judging from the scale of financing, financing time and the background of the financing party, it is surprising. Most of the investors are traditional investment institutions, and they all have many well-known successful investment cases.
What is so special about Bakkt that attracts so many investors to invest in the cryptocurrency winter?
The brightest part of Bakkt is the halo from the parent company Intercontinental Exchange Group.
Founded in 2000, Intercontinental Exchange Group owns 16 global exchanges and 5 central clearing houses. Intercontinental Exchange Group was listed on the New York Stock Exchange in 2005, and the listing was led by Kelly Loeffler, the current CEO of Bakkt.
At the same time, Intercontinental Exchange Group is also one of the constituent stocks of the S&P 500 Index, and the famous New York Stock Exchange also belongs to its name. Intercontinental Exchange Group is currently the second largest futures exchange in the United States and the third largest futures exchange in the world.
Secondly, in terms of staffing, Intercontinental Exchange gave Bakkt super luxury configuration.
The chief operating officer chose Coinbase vice president Adam White. Adam White joined Coinbase in its early stages and helped build Coinbase into one of the largest cryptocurrency exchanges in the United States.
Adam White joined Coinbase in 2013 and joined Bakkt in 2018 when Coinbase was at its peak. This also verifies from the side that Adam White is more optimistic about the future development of Bakkt.
Professionally, Bakkt has brought in Rich Mackey, vice president of independent futures broker Rosenthal Collins Group (RCG). Founded in 1923, Rosenthal Collins Group was acquired by Bakkt in 2018.
secondary title
highly anticipated regular army
Futures contract transactions that are delivered in physical bitcoins require custody licenses, trading licenses, and clearing licenses. Holding a Derivatives Clearing Organizations (DCO) license can conduct liquidation business, and holding a Designated Contract Markets (DCM) license can conduct trading business.
Bakkt acquired the Digital Asset Custody Company (DACC), which holds a DCO license, in 2018, thereby indirectly holding the DCO license.
In the middle of 2019, Bakkt obtained a DCM license from the Commodity Futures Trading Commission (CFTC) and a custody license from the New York Financial Services Authority (NYCFS). Since then, Bakkt has become a fully licensed exchange that can trade bitcoin futures contracts.
Bakkt's trading will consist of three parts: ICE Futures US (futures trading), ICE Clear US (clearing) and Bakkt (custody).
The reason why Bakkt is called a regular army is because it is standardized in every link, and every step is carried out under the legal framework.
In fact, BitMEX co-founder and CEO Arthur Hayes also said in an interview that institutional investors will buy futures directly on CME instead of trading on cryptocurrency exchanges.
After all, traditional investors prefer exchanges that are regulated and legally compliant.
Therefore, when the news of Bakkt came out, the market was also full of expectations, even more so than CME.
Both legal and compliant exchanges, CME and CBOE (Chicago Options Exchange) also belong to the "regular army", but why does the market expect more from Bakkt?
CME and CBOE’s bitcoin futures products are delivered in U.S. dollars, while Bakkt uses bitcoin for delivery. The use of bitcoin delivery will increase the demand for bitcoin by futures contract investors, which will affect market supply and demand, thereby raising the price of bitcoin.
secondary title
Will Bakkt be the start of the next bull run?
In addition to exchanges such as CME and CBOE that use USD for delivery and settlement, Bakkt also has a number of competitors that use Bitcoin for delivery and settlement.
Of course, exchanges that are currently legal and compliant and use Bitcoin for physical delivery are still a blue ocean.
Like Bakkt, the exchanges that focus on legal compliance and physical delivery in Bitcoin currently mainly include ErisX, LedgerX and Seed CX.
ErisX obtained the DCM license in 2011, and obtained the Derivatives Clearing Organization (DCO) license from the Commodity Futures Trading Commission on July 1, 2019, to trade Bitcoin futures.
The shareholders of ErisX are not smaller than Bakkt, including Monex Group and Pentera Capital, Bitmain, CBOE, Fidelity Investments, and Nasdaq Venture Capital.
LadgerX received its DCM license from the Commodity Futures Trading Commission on June 25, 2019. Prior to this, LadgerX had obtained Swap Execution Agency (SEF) and Derivatives Clearing Organization (DCO) registrations.
On May 22, 2017, LedgerX’s $11.4 million Series B financing came from Digital Finance Group and Miami International Holdings. Shareholders also include SV Angel, Hard Yaka, and Blockchain Capital, all of which are well-known investment institutions in the industry.
Two subsidiaries of Seed CX, Seed Digital Commodities Market (SCXM) and Zero Hash, both received virtual currency licenses from the New York Department of Financial Services on July 15, 2019. Bain Capital Ventures led a $15 million investment in Seed CX in 2018.
