Bakkt Completes Key Round of Financing, Delays Launch with New Timeline
Bakkt, the crypto-futures project of the ICE, is in advancing talks with regulators about the possibility of physical delivery, as well as the requirements for storage.
Bakkt, the ICE Exchange’s branch for Bitcoin (BTC) trading, may have moved a step closer to offering a unique physical delivery futures product. The upcoming exchange announced the successful fulfillment of a round of financing that raised $182.5 million. The relatively large-scale backing shows optimism for continued activity on the Bitcoin markets that could potentially break the bear market and price stagnation in the coming year.
Bakkt will not launch as intended on January 24, despite the positive news of the massive funding. The new delay arrived after consultation with the Commodity Futures Trading Commission (CFTC), the Bakkt team pointed out in a statement.
For now, Bakkt has abstained from a specific deadline for the launch, stating it would only announce the trading of futures as the launch is imminent. The potential of this financial instrument to boost the BTC market hinges on the possibility for physical delivery and storage.
“We’ll share details as the New Year unfolds, but as our COO Adam White and I work through Bakkt’s 2019 objectives, we are focused on opportunities to provide new infrastructure, including the industry’s first institutional grade regulated exchange, clearing and warehousing services for physical delivery and storage,” stated the Bakkt team.
The current state of cryptocurrency exchanges is highly uncertain, and incompatible with some standards in the traditional finance industry. Despite the fact that some exchanges have improved their transparency and disclosure by performing user screenings as well, the crypto ecosystem is seen as too risky to be used for large-scale institutional investments.
Currently, Bakkt has already submitted papers for review, and the launch of the exchange depends on regulatory approval. At the moment, Bitcoin futures are traded on the CBOE and CME, but with cash settlement, meaning there is no additional demand to acquire and store BTC as a form of settlement.
The launch of the Bakkt exchange will reveal how US regulators view digital assets, their ownership and delivery, which is an important development in a new industry where even the basic terms are still vague and are yet to see solid industry standards.