Bitcoin's market capitalization went from an all-time high of $19,800 in December 2017 but lost most of that value in less than a year. Now selling at a humble $3,475, this $60 billion market may have slowed down, but many exciting projects are going on around it. Cryptocurrencies may be down, but they are definitely not out.
Huge investors interest in blockchain technology
Most of this optimism arises from the interest huge wall street financial giants are showing towards the cryptosphere. Once a very skeptical bunch, and very averse to the market's volatility, today a massive percentage of these skeptics are staking their claims in the new brave world of digital currencies.
Bakkt, for example, has created a lot of buzz in the market mainly because its launch, though delayed a few times is bound to impact digital currency trading hugely. It is predicted that Bakkt could win its U.S Commodity Futures Trading Commission approval by March this year, beginning its physically deliverable bitcoin futures.
Regulation for progress
A lack of control, the fear of the dark web, liquidity issues and at times the overexaggerated crypto connections have painted the digital currency world as a no go zone for most investors. But these Wild West days of crypto are quickly coming to an end, with a lot of regulatory measures being put in place.
This has attracted more old money in it, something the market needs, especially now that it is floundering. This Bloomberg report states that today institutional investors have edged out individual buyers in the digital currencies $100,000 range.
Fidelity has over 25 million clients on its portfolio while another giant entrant to the market TD Ameritrade is getting in with its 11 million clients. BlackRock Inc, Morgan Stanley, and Goldman Sachs are building projects around blockchain and with their large client bases and deep pockets, the impact their numbers will have on cryptocurrency trading could ignite the next huge wave.
What does Bakkt bring to the table?
Bakkt, backed by the Intercontinental Exchange (ICE) aims to provide regulatory services to traditional and institutional investors interested in Bitcoin and the altcoins as well. The Intercontinental Exchange is the New York Stock Exchange (NYSE) parent company which signals institutional investment and the mainstream acceptance that cryptocurrencies have craved for years.
These financial power could direct huge investments tied up in bonds, stocks and a myriad of other financial instruments and blow the total market capitalization of digital currencies through the roof. There is also the question of legitimacy Bakkt would bring to this arena, helping it make its way to more considerable mainstream acceptance and adoption. This, in turn, will turn the cryptosphere from a technophile toy a crucial financial tool globally.
Bakkt enters the market with the support of marquee big names like Microsoft, Starbucks, and BCG. Using Microsoft's Azure cloud service, Bakkt intends to "create an open and regulated, global ecosystem for digital assets." Bakkt will start with the inclusion of facilities regulated by the federal government, like warehousing. It will cater for Bitcoin to fiat conversions, something most digital currency traders yearn for when dealing with other crypto exchanges. Bakkt has plans to serve this market with a movement value of $270 billion annually, building global confidence in the asset class.
They aim to bring trust and transparency to an unregulated market with their flagship offering being a clear-house plan coupled with physical warehousing for a physically delivered Bitcoin contract.