Bakkt Pros vs Cons: Evaluating Intercontinental Exchange’s Crypto Trading Launch For January 2019

 Pros And Cons Of The Launch Of Bakkt In January 2019 The launch of Bakkt in January 2019 is set to be a major landmark for the crypto industry. Bakkt is an ambitious crypto startup supported by some major players in the American corporate space. Some believe the launch of Bakkt’s crypto trading platform will kickstart the next bull run. Others believe the launch of Bakkt will have minimal impact on the community. What are the pros and cons of the launch of Bakkt? Martin Weiss of Weiss Cryptocurrency Ratings recently sat down with Dr. Bruce Ng to discuss the pros and cons of the launch of Bakkt. Dr. Ng is an expert in distributed ledger technology (DLT) and does technical crypto analysis work for Weiss Cryptocurrency Ratings, a ratings agency dedicated to analyzing various crypto projects. We’re generally assumed that the launch of Bakkt is going to have a net positive effect on the crypto space – but that’s not guaranteed. Let’s take a look at some of the pros and cons of the launch of Bakkt as explained by Dr. Ng. What Is Bakkt And Why Is It A Big Deal? Bakkt is a crypto startup that burst onto the scene in August 2018. At first glance, Bakkt looks like a huge deal for the crypto industry. First, Bakkt is owned by Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange (NYSE). ICE was responsible for bringing added legitimacy to gold markets in the early 2000s while paving the way for investment products like gold ETFs. Second, Bakkt is supported by some of America’s largest and most powerful corporations. Starbucks and Microsoft, for example, have invested in Bakkt. What exactly does Bakkt want to sell? Bakkt will provide crypto on-ramp services to institutions and retail investors. They will allow retail and institutional investors to more easily buy, sell, and trade cryptocurrencies. Thanks to Bakkt, anyone who wants to buy crypto will be able to do so in a safer, easier, and more regulated way. When Bakkt launches, institutions who have wanted to invest in crypto will be able to do so. These institutions may have money “sitting on the sidelines” waiting for an institutional custody service like Bakkt to launch. That all sounds good – but there are obviously some pros and cons to the launch of Bakkt. Let’s take a closer look. Why The Launch Of Bakkt Will Be A Good Thing For Crypto The launch of Bakkt will be a good thing for the crypto space for all of the following reasons: Bakkt will provide a scalable crypto trading platform for institutions who wish to invest in cryptocurrencies Overnight, institutions will have a safe, secure, and regulated way to buy cryptocurrencies in a trusted trading environment Bakkt will offer a regulated custody service for secure storage of real bitcoin Bakkt will have a payment platform allowing customers to pay with crypto for anything from a Starbucks coffee to computer products from Microsoft ICE, the owner of the New York Stock Exchange, is the parent company of Bakkt and brings enormous experience and influence to the company ICE not only owns Bakkt and the NYSE; they also own ICE Data Services, SuperDerivatives, TMC Bonds, The Clearing Corporation, Singapore Mercantile Exchange, and many other entities Last year, ICE reported profits of $5.8 billion; the company has 5,000 employees worldwide and a stellar reputation In addition to Microsoft and Starbucks, Boston Consulting Group has also invested in Bakkt; Boston Consulting Group is a major partner that is expected to open the door to crypto investing to a host of Fortune 500 companies Starbucks is America’s leader in mobile app payments with 23 million users; that’s more than Apple Pay (22 million users) and Google Pay (11 million) Bakkt will emphasize futures trading with real, physical bitcoin, not the leveraged bitcoin trading we see on existing futures markets like CME and Cboe; that means any bitcoin bought on futures markets from Bakkt will be real bitcoin and will be added to the company’s custody, directly boosting demand on the market For all of these reasons, Bakkt is expected to draw big institutional money into the crypto space while ushering in a bull market. Due to all of the advantages listed above, Bakkt will cause markets to surge while paving the way for a brighter crypto future. Of course, it’s not all sunshine and rainbows. There are some cons to the launch of Bakkt. Cons Of Bakkt Bakkt’s launch could have some negative effects on the crypto space, including all of the following: Bakkt could lead to the launch of high-risk crypto derivatives, including derivatives similar to the one that aggravated the 2008 debt crisis (which, ironically, led to the rise of bitcoin in 2009) Big Wall Street institutions could use their enormous sway and capital to manipulate or exaggerate the price of bitcoin and other cryptocurrencies, playing big games with each other while smaller investors lose Bakkt will increase the institutionalization of bitcoin, which some crypto enthusiasts find worrying; bitcoin was founded as a decentralized system outside of the control of financial institutions and governments Bakkt’s team, meanwhile, is assuaging all of these concerns. The Bakkt team insists that there will be no leverage, commingling, or rehypothecation, for example. All bitcoin traded on the Bakkt platform will be linked to real, physical bitcoin. This should avoid many of the derivative-related problems the financial industry has experienced in the past. 4 Reasons The Launch Of Bakkt Will Be A Good Thing The launch of Bakkt is expected to be a good thing for the crypto industry for all of the reasons below: More Volume: Bakkt will make it easier for retail and institutional investors to participate in crypto trading. Bitcoin futures market trading volume has been lagging lately, and some believe Bakkt will rejuvenate the space. ETF Approval: Some believe that the launch of Bakkt will lead the way directly to bitcoin ETF approval by the SEC. The SEC has repeatedly expressed concern with price manipulation and inadequate price discovery in the bitcoin world. Bakkt will solve these issues with a regulated crypto platform and custody solution. Institutional Custody: Bakkt will provide custody solutions to institutional investors. Institutional investors can participate in crypto without handling crypto themselves. Regulated ICOs: Bakkt could facilitate the launch of regulated ICOs, paving the way for companies to launch token sales in the future in a legal, regulated, and secure way. Conclusion Bakkt is expected to launch its first product, bitcoin futures trading, on January 24, with other products rolling out throughout 2019. Optimists believe the launch of Bakkt will cause billions of dollars to pour into the crypto space from institutional investors. Pessimists, meanwhile, point to the fact that institutional-grade custody services are already available and that institutions already have a way to invest in crypto. Ultimately, the community assumes that Bakkt will have a net positive effect on crypto. However, it’s not exactly a foregone conclusion, and there are certain cons linked to the launch of Bakkt. Nevertheless, it appears that Bakkt could be a major turning point for the crypto space and that 2019 could be a landmark year for crypto adoption. By Andrew T - December 8, 2018 The Source: https://bitcoinexchangeguide.com/bakkt-pros-vs-cons-evaluating-intercontinental-exchanges-crypto-trading-launch-for-january-2019/