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April 2013

Bakkt to Launch Institutional Bitcoin Custody Services



Bakkt, the crypt subsidiary of the Intercontinental Exchange, has announced that it will begin holding the Bitcoin assets of its institutional investors, which was one of the most sought-after services of the platform prior to its launch in September.

Launch of Bakkt Warehouse

Upon launch, Bakkt initially only offered custody services to customers who were trading its Bitcoin futures contracts but has now received approval from the New York Department of Financial Services (NYDFS) to store all Bitcoin assets of its customers in the “Bakkt Warehouse.” Pantera Capital, Galaxy Digital, and Tagomi have already signed on as initial customers, with other major firms expected to join over the next few weeks.

Bakkt COO Adam White described custodial services as “a critical link … in the institutional adoption of bitcoin.” He added that “our relationship with Intercontinental Exchange (NYSE: ICE), a Fortune 500 company that owns and operates the market infrastructure upon which the world’s largest financial institutions already rely, enables us to uniquely address client needs in the digital asset custody space.”

Bitcoin Futures Trading Picks Up Pace

Bakkt has been heralded as a landmark arrival in the crypto space due to its close links with legacy institutions, like the New York Stock Exchange, which it hoped would provide a gateway into crypto trading for institutional investors. However, the platform has endured a slow start to life. With just 623 futures contracts being traded in the first week, for a total value of just over $5 million USD, it appeared as though the platform was a massive flop.

>> Alibaba to Reward Free Bitcoin Through Shopping App Lolli

The rollout of new services and the recent Bitcoin movement look to have stimulated an increase in activity for Bakkt. Over the weekend, the platform registered the largest single-day trading volume of its monthly Bitcoin futures contracts. The volume hit approximately $15.33 million USD on Friday, passing its previous high of $10.25 million USD on October 25. The total volume of Bakkt’s monthly Bitcoin futures now stands at $106.74 million USD since its launch on September 23.

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Binance Makes Investment in Chinese Crypto Media Firm Mars Finance



Binance, the world’s largest crypto exchange, has made an undisclosed investment in Chinese crypto news outlet Mars Finance.

Binance participated in a funding round for the blockchain media firm, which brought its valuation to $200 million USD in what was the third such financing since Mars Finance was founded last year. Specifically, Mars Finance provides information and news updates on blockchain, crypto markets, and asset management services. According to a press release issued by the company, it is now China’s most popular crypto news outlet in terms of traffic.

Mars Finance, which can be found at the domain, was founded in February 2018 by Wang Feng, and currently has about 124,000 monthly visitors according to SimilairWeb. The English language version of the website has been inactive for most of the year; however, with the launch of Binance US this week, perhaps the exchange made the investment with the intention of producing new content for the site aimed at investors in the US.

Binance CEO Changpeng Zhao said of the investment, “We have large respect for data, news and research firms which support the positive growth of the blockchain industry. We will continue to pursue strategic investment opportunities in our mission to bring crypto further mainstream, increase adoption and accessibility, and help the industry grow sustainably.” This marks the first time Binance has made an investment in China since leaving country as a result of the local crypto trading ban in 2017.

>> Ripple (XRP) Soars 15% Suddenly, Other Cryptos Follow

Meanwhile, Binance looks set to launch in the US with Binance US accepting deposits from tomorrow, September 18. The exchange was previously blocked from launching in the US due to the fact the company never officially operated in the country. However, Binance US has the approval of regulators and is led by Ripple’s former head of institutional liquidity, Catherine Coley. Binance US will accept deposits of Bitcoin, Ethereum, XRP, Bitcoin Cash, Litecoin, and USDT.

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Bakkt Futures Trading Volumes Continue to Grow—But There’s a Catch



Bakkt futures trading volume hit a record high of 4,269 BTC in a single day; however, very little Bitcoin has actually been physically settled on the exchange.

The launch of the futures trading exchange from the Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, was one of the most highly anticipated events on the 2019 crypto calendar. However, Bakkt got off to a sluggish start and traded only 623 futures contracts in the first week of launch in late September. Volume has started to pick up pace in recent weeks, hitting ~$37.45 million on Wednesday, passing its previous high of ~$19.96 million on November 22.

The interesting thing about Bakkt’s platform is that its futures are physically settled, meaning all trades are settled in Bitcoin rather than the cash equivalent. The catch is that very little Bitcoin has actually been settled by the exchange. According to trader Alex Krüger, in the months of October and November, Bakkt has delivered just 32 BTC, worth $242,000 at today’s prices, for its monthly futures.

Bakkt’s physically settled futures contracts are considered a revolutionary concept for the future of Bitcoin as it means institutional investors will end up holding Bitcoin in their portfolios rather than the cash equivalent, meaning real crypto adoption on Wall Street. “The more regulated volume, the better. Bakkt’s growth is very positive. Yet keep present Bakkt is not that different from the CME. It is almost entirely paper trading,” said Kruger.

>> Bitcoin Corrects 45% from Highs: Is the Correction Over?

Bakkt will launch cash-settled futures on December 9 in an effort to get closer to its biggest rival, the Chicago Mercantile Exchange (CME). The CME has offered Bitcoin futures for nearly two years, and in Q3 of this year, it averaged 5,534 contracts per day, equal to 27,670 Bitcoin, worth $289 million at the time. However, CME settles its contracts with fiat currency, a direction in which Bakkt appears to be heading.

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