Category Archives: Bakkt

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Bakkt Acquires “Certain Assets” from Rosenthal Collins Group

Rosenthal Collins

Intercontinental Exchange-backed digital asset platform Bakkt has announced the acquisition of assets of Rosenthal Collins Group (RCG), in the furtherance of its objective to build the first integrated, institutional grade exchange-traded markets, and custody solution for physical delivery of digital assets.

CEO of Bakkt Kelly Loeffler made the announcement in a blog post yesterday, stating that the project had entered into an agreement with RCG – an independent futures commission merchant – to build on the experience established by the business.

RCG is a 95-year old Chicago-based futures brokerage business which announced last December that it was selling off its customers’ business to Marex Spectron – another world-renowned commodities brokers – out of which Bakkt had opted in to obtain a part of the business assets.

According to Loeffler, the acquisition of “certain valuable assets” was necessary for the development of the Bakkt platform. She highlighted enhancement of risk management and treasury operations with systems and expertise as possible areas of benefits of the new acquisition while expressing her enthusiasm about onboarding the team from RCG.

As per the announcement, there might be a possible delay in the launch of the Bakkt platform as initially scheduled for this month. Loeffler said: “This acquisition underlines the fact [that] we’re not standing still as we await regulatory approval by the CFTC for the launch of regulated trading in our crypto markets.”

The team is sure putting in a tremendous amount of efforts to meet the expectations of the masses after being lauded as a platform to make a significant impact in cryptocurrency adoption since its introduction in August last year.

Loeffler made this clear when she said, “Our mission requires significant investment in technology to establish an innovative platform,” adding that “financial market expertise” is an essential component to developing the “most trusted fintech ecosystem for digital assets”.

Despite the delay, their tracks so far have been lined with some degree of success. The recent seed funding of over USD 182 million goes on to show that a lot of key players are supportive of a successful launch of the platform.

 

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90-Year-Old Hong Kong Billionaire “Superman” Backs Bakkt

90-Year-Old Hong Kong Billionaire

The owner of venture capital firm Horizon Ventures, Li Ka-shing, has become the latest proponent of cryptocurrency platform Bakkt investing heavily in Bitcoin. Bitcoin backers abound around the world but experience wise with his 90 years, Hong Kong billionaire Li Ka-shing, known affectionally as Superman, is way up there.

The Bakkt project has delayed its launch twice in a row with a timeline now set for early 2019, in line with CFTC’s process and timeline.

Bakkt has already announced its successful first seed funding round of USD 182 million with 14 investors and partners listed to have participated. Intercontinental Exchange, Goldfinch Partners, Boston Consulting Group, Microsoft’s Venture Capital arm and Pantera Capital were among participants.

Li, who is said to be worth about USD 34.9 billion, has made some major forays into the cryptocurrency space late in his business career, including Bitpay in 2013 and Blockstream in 2016, through his company Horizon Ventures. Bitpay also attracted another “Superman”, British Virgin entrepreneur Sir Richard Branston, who also put about USD 30 million of his money into the Bitcoin payment service provider headquartered in Atlanta.

The Bakkt Bitcoin platform, which is being developed with New York Stock Exchange owner Intercontinental Exchange, Starbucks, and Microsoft, will offer Bitcoin futures trading once the launch date has been announced, opening up the opportunity for users to buy, sell, store and spend cryptocurrencies through MS Cloud. Global coffee chain Starbucks will allow customers to convert Bitcoin and other cryptocurrencies to US dollars to make purchases in their stores.

 

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Coinfloor to Launch Derivative Crypto Futures Amid Tough Market

coinfloor derivative crypto futures markets bitcoinnews

Top UK cryptocurrency exchange Coinfloor has told Bloomberg, that it is venturing into the derivatives market despite the seemingly poor market outlook and fierce competition in the futures market, with physically-delivered Bitcoin futures the new emerging derivatives for the asset class.

The CoinfloorEX spinoff of the Coinfloor cryptocurrency exchange will be offering the new physical Bitcoin futures services to sophisticated Asian traders. Meanwhile, it has been renamed to Coin Futures and Lending Exchange (CoinFLEX) for this purpose.

According to the CEO of CoinFLEX Mark Lamb, who is also a co-founder of Coinfloor, “bear cycles in crypto can go on a long time, but ultimately it’s an asset class which is one of the most fascinating, volatile, which is great for traders”. Lamb also downplayed the current market condition, confident that crypto will someday become globally accepted, saying that “it has the potential to be one of the major currencies in the world”.

CoinFLEX will have its base in Hong Kong. The proposed derivatives will include physical futures for Bitcoin, Bitcoin Cash, and Ethereum with leveraging of up to 20 times. Comparatively, top cryptocurrency exchange BitMex, also having a sizeable market in Hong Kong, will be a competitor as it also offers leverage of up to 100 times on some of its contracts. However, CoinFLEX has the advantage of physical delivery as against cash settlements that are prone to manipulation.

Prominent crypto movers have been named as members of a consortium owning the project, including Roger Ver, Mike Komaransky and Trading Technologies International Inc. Meanwhile, Coinfloor is also reported to be retaining an equity stake in the new venture.

It would seem that the market for institutional investors is constantly being expanded with multiple derivative options. “Crypto derivatives could become an order of magnitude larger than spot markets and the main thing that’s holding back that growth is the lack of physical delivery,” said Lamb.

Last year, talks about the proposed Bakkt platform – an Intercontinental Exchange (ICE) project – constantly drove up the expectations of cryptocurrency holders and investors. Its recent announcement included a successful seed round funding of over USD 182 million, and a scheduled launch early this year, however, the date “will be amended pursuant to the CFTC’s process and timeline”.

Another derivative platform, ErisX, recently reeled in USD 27.5 million from Fidelity Investments, Nasdaq Ventures, and other investors during a seed funding round. It is also waiting for approval from financial regulators before launching this year.

Recently, the Japanese financial regulator hinted on the possibility of the launch of exchange-traded funds (ETF) that will be based on the new asset class.

 

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No Evident Impact on Bitcoin in Week 2 of US Gov Shutdown

No Evident Impact on Bitcoin in Week 2 of US Gov Shutdown

The Government’s partial shutdown in the US following the row over Donald Trump’s plans for a Mexico border wall has impacted government-run institutions, but its effect on Bitcoin seems to have made a little impact so far.

So far, during the third of such shutdowns in the last 12 months, stock markets have reacted with gains and losses yesterday with fears of a global economic slowdown against the backdrop of President Trump’s decision impacting government services in the US.

On the cryptocurrency front, little effect is evident so far. In fact, the trend has been upward over the past few days with Bitcoin trending between $3830.50 and $4,048.80 over the past two days. Although it’s still early days in the current shutdown, the first of such measures saw a drop in the price of Bitcoin, the second lasted only one night.

After two weeks, Bitcoin’s volatile nature makes it hard to establish whether any fluctuations are the result of what is happening in Washington. However, a prolonged shutdown has analysts considering what may be ahead, particularly with the planned Jan 24thlaunch of Bakkt scheduled for Commodity Futures Trading Commission (CFTC) approval.

Another factor to consider is how the shutdown will affect the U.S. Department of the Treasury, which has already been partially responsible for the Smithsonian being closed due to Federal Reserve Funds not being able to be transferred to government departments in the normal way.

There is a fear that the US dollar value might suffer as the Federal Reserve is seen as not being able to complete its usual tasks, although the country’s banks and other depository institutions still receive Federal Reserve support as normal.

Some economists have suggested that such a fear, although largely unfounded, might strengthen the position of cryptocurrencies, and in the extreme, provoke a dollar nosedive. It has become common to associate cryptocurrency with economic downturns in countries such as Venezuela, where Bitcoin use is propping up many local economies as the Venezuelan Petro becomes all but worthless.

At the very least, any damage to the value of the US dolljar because of an ongoing shutdown of government services is likely to bring more attention to alternative currencies such as digital money.

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Bakkt Announces $182.5 Million Funding Round, Launch Set for Early 2019

Bakkt Announces 2.5 Million Funding Round, Launch Set for Early 2019

In a blog post yesterday, institutional grade digital asset platform Bakkt announced the successful first seed funding round of USD 182 million.

According to the blog post, fourteen investors and partners were listed to have participated in this round, out of which 12 of them had raised the sum. Big players in the traditional finance and fintech industry were mentioned, to include Intercontinental Exchange, Goldfinch Partners, Boston Consulting Group, Microsoft’s Venture Capital arm and Pantera Capital.

The Bakkt project has for the latter part of 2018 been touted as the platform to finally make way for mainstream institutional investors to get into the cryptocurrency game. The blog reads: “Our work today is centered on driving institutional access for digital assets, along with merchant and consumer uses.” The project also revealed that they have expanded the vision to drive mainstream cryptocurrency adoption for the everyday user by extending their partnership to companies like Starbucks.

The announcement also included a current status of the project such as “working closely with the Commodity Futures Trading Commission for the better part of 2018” in order to obtain “regulatory approval for physically delivered and warehoused bitcoin.” They have also “filed applications and the timing for approval is now based on the regulatory review process.”

Another relevant angle the project will tackle while working through the 2019 objectives will also include a focus on “opportunities to provide new infrastructure, including the industry’s first institutional grade regulated exchange, clearing and warehousing services for physical delivery and storage,” reads the blog post.

The project has delayed its launch twice in a row as another official publication reveals that the updated launch timeline which was set for 24 January 2019 will be amended and set for early 2019, in line with CFTC’s process and timeline.

The blog post also revealed as many would agree, that 2018 was indeed an active year for cryptocurrency with Bitcoin at the center stage as volatility index peaked, as well as a notable increase in investment from venture capitals in distributed ledger technology and digital assets.

Many analysts and cryptocurrency enthusiasts have opined that the coming of the Bakkt will play a crucial role in restoring the market from the year-long bearish trend.

 

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As Bakkt Looms, Wall Street Boss Says Bitcoin Here to Stay

As Bakkt Looms, Wall Street Boss Says Bitcoin Here to Stay

Jeff Sprecher, CEO of the NYSE’s parent company Intercontinental Exchange (ICE), has asserted that digital assets will survive, regardless of the market’s dips and dives as seen over the past weeks.

A firm backer of Bitcoin, Sprecher had announced that, with the help of technology partner Microsoft, ICE was planning to launch a new digital asset platform called Bakkt. Starbucks and Microsoft will be major partners of the much-anticipated platform Bakkt and are reportedly going to accept Bitcoin and other cryptocurrencies.

The excitement surrounding Bakkt is centered around its plans to launch physically-settled Bitcoin futures by January next year; recent market sentiment is thought to have postponed the launch, originally scheduled for late 2018.

Sprecher reflected on recent events in the market and Bitcoin’s current position: “Somehow Bitcoin has lived in a swamp and survived… There are thousands of other tokens that you could argue are better but yet Bitcoin continues to survive, thrive and attract attention… Often times in finance, it’s not about being the best — it turns out to be about being the broadest and the most commonly accepted and for whatever reason Bitcoin has become that.”

Despite SEC commissioner Hester Peirce declaring in a 24 November podcast that long-awaited ETF approvals are “definitely possible”, the SEC warns that these won’t be any time in the near future. Kelly Loeffer, Bakkt’s CEO and wife of the NYSE chairman, claims that Bakkt is creating its own opportunities for the future, stating:

“We’re creating that infrastructure that doesn’t exist today, which we think is a big opportunity for institutional investors to come in.”

As for the future, Nasdaq seems unfazed and retains a bullish optimism with its plans to launch Bitcoin futures in 2019 through its partnership with VanEck . Both Nasdaq and the NYSE forging ahead towards becoming cryptocurrency exchanges and Nasdaq’s CEO Adena Friedman asserted that over time the exchange giant could become a cryptocurrency exchange once “the sector matures”.

Clearly, major players are not simply waiting on the SEC for ETF game-changing thumbs up in 2019. New Year’s resolutions are already being made.

 

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Physical Bitcoin Futures on Bakkt Delayed to Q1 2019

Bakkt, a new cryptocurrency exchange which is being operated by the Intercontinental Exchange (ICE), has pushed back its launch to 24 January 2019, and this is still subject to regulatory approval. It originally projected that physical Bitcoin futures would launch on 12 December 2018. The announcement came on a day Bitcoin price hit new lows not seen since October 2017, briefly dipping to as low as USD 4,000.

There are already futures on the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE) but since these are cash settled, they do not directly influence Bitcoin’s spot demand or price. Experts in the crypto space believe physical Bitcoin futures on Bakkt could be a major conduit for institutional money to enter the market as this product would have been available on all major stock trading platforms. Bakkt futures would settle the same day and investors would receive Bitcoin directly into their wallets, which would have directly increased spot demand and price.

The CEO of Bakkt, Kelly Loeffler, wrote in a blog post that Bakkt has been working closely with the Commodities Futures Trading Commission (CFTC) and a thorough review is underway. Loeffler said, “Given the volume of interest in Bakkt and work required to get all of the pieces in place, we will now be targeting January 24, 2019 for our launch to ensure that our participants are ready to trade on Day 1. As is often true with product launches, there are new processes, risks and mitigants to test and re-test, and in the case of crypto, a new asset class to which these resources are being applied. So it makes sense to adjust our timeline as we work with the industry toward launch.”

Beyond the delay, Loeffler asserts that Bakkt is making substantial progress, such as securing insurance for Bitcoin cold storage and potentially getting insurance for Bitcoin hot wallets. Loeffler states, “We are focused on every aspect of delivering an institutional grade crypto warehouse solution and believe this is a significant step in building confidence in this asset class.”

This announcement comes at a particularly unfortunate time for the Bitcoin market, with the price declining from USD 6,500 to USD 4,600 in about a week, coinciding with SEC enforcement against initial coin offerings (ICOs) and the Bitcoin Cash fork.

 

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Lawyer Claims Bakkt Can Bypass Approval for Physical Bitcoin Futures

Crypto lawyer Jake Chervinsky has determined that Bakkt does not need direct approval from the Commodity Futures Trading Commission (CFTC) to launch the physical Bitcoin futures, so it appears the launch date will proceed as scheduled.

The cryptocurrency markets are highly anticipating the launch of physical Bitcoin futures on Bakkt on 12 December 2018. It is a new cryptocurrency exchange which will be owned by the Intercontinental Exchange (ICE), the same organization that runs the New York Stock Exchange (NYSE).

14/ A designated contract market like ICE can file a self-certification submission as late as one business day before initial listing.

That means ICE technically doesn’t have to file Bakkt’s papers until Tuesday, December 11 for Bakkt to launch futures on Wednesday, December 12.

— Jake Chervinsky (@jchervinsky) November 6, 2018

According to Chervinsky, ICE is a CFTC certified designated contract market, allowing it to self-certify new futures offerings without any prior approval. ICE and Bakkt can submit the filing for physical Bitcoin futures as soon as one day before launch. Chervinsky says the CFTC will probably publish a press release about the futures when the self-certification occurs.

16/ Consider the process that CME & CBOE went through to get approval for their bitcoin futures last year.

Both of them ended up self-certifying, but only after *months* of negotiations with the CFTC & changes to their products.

The CFTC explains here: (https://t.co/B0tuugmPDx)

— Jake Chervinsky (@jchervinsky) November 6, 2018

However, if the CFTC disapproves of the physical Bitcoin futures, they could find some way to block them after launch. At this time, there is no evidence that this will happen otherwise, the controversy would have already been underway as seen when cash-settled Bitcoin futures were launched on the Chicago Mercantile Exchange (CME) and Chicago Board Options Exchange (CBoE). It took months of negotiations for CME and CBoE to reach an agreement with the CFTC, even though those exchanges can self-certify like Bakkt.

Bakkt CEO Kelly Loeffler indicates that the plans for the physical Bitcoin futures would be reviewed and approved by the CFTC before launch, probably to maintain 100% compliance with regulators and avoid problems in the future.

The reason the Bakkt physical Bitcoin futures are important is that they would allow institutional investors to buy Bitcoin in a safe and regulated way on major stock trading platforms. The futures settle the same day and investors receive actual Bitcoin in their accounts, unlike the cash settled futures in Chicago. Market demand for the physical Bitcoin futures is expected increase demand on Bitcoin spot markets, which could possibly lead to a major Bitcoin price increase.

 

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Physical Bitcoin Futures on Bakkt, Launch Set for December 12, 2018

The Intercontinental Exchange (ICE), which operates 6 clearinghouses and 12 stock exchanges including the New York Stock Exchange (NYSE), has announced that physical Bitcoin futures will go live on 12 December 2018 on their first crypto exchange, Bakkt. Physical Bitcoin futures could lead to a major rally driven by institutional investments.

The Bitcoin for physical Bitcoin futures will be held in the ICE Digital Asset Warehouse, which is ICE’s new cryptocurrency custodian. After an investor buys physical Bitcoin futures they will be settled the same day at 5 pm Eastern United States time, and delivered into the investor’s account at the Digital Asset Warehouse, after which point the investor can use the Bitcoin as they wish. This essentially provides a way for investors and traders to directly buy Bitcoin in a safe and regulated way, and the physical Bitcoin futures should be available on all stock trading platforms.

There are trillions of USD traded and invested on stock trading platforms, and the physical Bitcoin futures will open up Bitcoin to this immense pool of capital. To put this in perspective, Bitcoin’s market cap is USD 112 billion as of this writing on 23 October 2018, while the NYSE alone has a USD 18.5 trillion market cap, while globally the 60 major stock exchanges in the world have a market cap of USD 69 trillion. If even a small fraction of the money in stocks is diversified into Bitcoin, it could lead to the biggest Bitcoin rally in history.

There are already Bitcoin futures available on the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE), but the difference is these are cash settled futures and there are no bitcoins backing them. Therefore, money invested into the currently existing cash-settled futures does not increase spot demand for Bitcoin. The physical Bitcoin futures on Bakkt will directly increase spot demand for Bitcoin.

Other details about the Bakkt physical Bitcoin futures include the contract size which will be 1 bitcoin, the contract symbol will simply be BTC, and trading for each daily contract will occur from 8 pm to 6 pm Eastern United States time with a pre-open at 7:55 pm. Therefore, unlike Bitcoin spot exchanges, there will be a couple of hours each day where the market is closed for physical Bitcoin futures. The physical Bitcoin futures will be listed on the ICE Futures U.S. exchange, and the clearinghouse will be ICE Clear U.S.

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Bakkt Re-Affirms Imminent Physical Bitcoin Futures

It’s been about two months since the Bakkt cryptocurrency exchange was announced by the Intercontinental Exchange (ICE), along with the groundbreaking announcement that it would offer the first officially licensed and regulated physical Bitcoin futures in the United States.

Bakkt has re-affirmed that these physical Bitcoin futures are on the way as of 25 September 2018, and everything appears on track for them to launch in November 2018, little over a month from now. The exchange is saying that physical Bitcoin futures will be available in GBP and EUR in addition to USD.

Our first contracts will be physically delivered Bitcoin futures contracts versus fiat currencies, including USD, GBP and EUR. For example, buying one USD/BTC futures contract will result in daily delivery of one Bitcoin into the customer’s account.

— Bakkt (@Bakkt) September 25, 2018

Currently, the only Bitcoin futures available are cash-backed and cash-settled futures on the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE). Since these Bitcoin futures in Chicago are entirely backed by cash and settled for cash they can be considered paper Bitcoins. Investors purchasing paper Bitcoins in Chicago do not increase spot market demand and in fact, divert money away from Bitcoin spot markets long term.

Additionally, shorting Bitcoin futures in Chicago probably leads to market manipulation that causes Bitcoin’s price to go down, particularly around the time monthly futures contracts expire. It appears traders could be manipulating Bitcoin spot markets to crash to increase short sale profits from future contracts.

The Bitcoin futures that will probably be launched by Bakkt in November 2018 will be the first physical Bitcoin futures. They will be settled for actual Bitcoins on a daily basis, meaning an investor who buys Bitcoin future contracts on Bakkt will directly receive Bitcoins into their accounts on the same day when contracts settle. This means that physical Bitcoin futures contracts on Bakkt will directly increase spot demand for Bitcoin and, therefore, increase global Bitcoin price.

Effectively, the physical Bitcoin futures contracts on Bakkt will allow traders and investors to buy Bitcoin in a safe and regulated way, ideal for institutional investors. It is likely that the physical Bitcoin futures contracts on Bakkt will be available on all major stock trading platforms as well, which could pave the way for a major Bitcoin rally.

 

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