Bakkt to Foster Institution & Consumer Participation, No Leverage & Margin on Bitcoin Contracts

Bakkt, the digital asset platform by NYSE’s owner and backed by Microsoft and Starbucks is working hard at building a transparent and an institutional quality ecosystem for digital assets. CEO Kelly Loeffler explains that they are offering full collateralized or pre-funded bitcoin buying and selling meaning there will be no leverage or margin involved.

NYSE owner’s Bakkt hard at work

It’s been only two weeks that NYSE’s owner, Intercontinental Exchange announced the “launch of regulated, physical Bitcoin futures contract and warehouse planned for November 2018.” Bakkt, a global platform “designed to bring digital assets to the mainstream and help unlock the potential of this important technology.”

In its latest official blog, Kelly Loeffler, the CEO of Bakkt is talking about being already at work on creating an open and regulated ecosystem for digital assets. She shared how in 1999, Nobel Laureate Milton Friedman has predicted the emergence of e-cash and “now are we seeing the promise of a true digital currency.”

From regulated, institutional trading and security solutions to offering more transaction choices to a customer, Bakkt is working on the wider application of digital assets.

The news of the Bakkt has been seen as one of the most important ones for the investors and experts alike. And given the giants viz. Microsoft and Starbucks included in this, it certainly holds a lot of potential for the future of the crypto market. Loeffler acknowledged the “very strong” response they received from worldwide.

People are certainly feeling positive as Mike Strutton of Ironwood shared:

“We may think #ETFs are the big story for #Bitcoin. I believe @Bakkt & “physical” bitcoin futures are going to drive the price – their vision for institutional and consumer retail sounds strong. November will be exciting. Congrats to CEO Kelly Loeffler, woman in crypto.”

Also, read: PwC & NYSE Top Executives Quit to Join BitcoinFirms

Fully collateralized Bitcoin buying & selling

Talking about the widespread need for a trusted infrastructure for storing, spending and trading cryptocurrencies. In order to achieve this, they are working on the “proven framework” comprising of, a consistent regulatory construct, transparent, efficient price discovery, and an institutional quality pre- and post-trade infrastructure.

With a special emphasis on “price discover”, she shares that “trusted price formation is a fundamental part of advancing the promise of digital currencies.” She further talks about not allowing margin or leverage on their contracts stating:

“Specifically, with our solution, the buying and selling of Bitcoin is fully collateralized or pre-funded. As such, our new daily Bitcoin contract will not be traded on margin, use leverage, or serve to create a paper claim on a real asset. This supports market integrity and differentiates our effort from existing futures and crypto exchanges which allow for margin, leverage and cash settlement.”

She further adds:

“Coupled with a secure, regulated warehouse solution, you can begin to see how this market infrastructure can help more institutions and consumers participate in the asset class.”

However, some were quick to point out as did Caitlin Long, a Wall Street veteran,

“Interesting response from @Bakkt today. For #bitcoin this is good news/bad news. First the good–Bakkt disclosed it’s not using margin or leverage (explicitly). That’s positive. But then the bad–it was silent about hidden leverage, which is subtle…”

The blog also points out the fact that the market cap recently dropped below $200 billion but ICOs, corporate R&D and venture investing is still going strong in this arena. This potential has the team excited about the upcoming launch.