The Debate on Bakkt and Its Potential Impact on Bitcoin
Bakkt CEO Kelly Loeffler announced in a blog post that the new platform, which will enable people and institutions to buy, sell, store and spend digital assets in a regulated ecosystem, will not support margin trading, leverage or cash settlements.
Bakkt will be based on a one-day “physical Bitcoin futures contract” that will deliver Bitcoin on a specified date and help create “trusted price formation.”
Bakkt, which was unveiled two weeks ago, is backed by the Intercontinental Exchange (ICE), parent company of the New York Stock Exchange. Because it promises to usher digital assets into the mainstream world of finance, everyone from investors to prognosticators to Wall Street execs has been weighing in on whether or not it’s actually good for Bitcoin and the crypto space.
According to Loeffler, the buying and selling of Bitcoin will be “fully collateralized or pre-funded.” And that should quiet the skeptics who claim Bitcoin is nothing because it’s backed by nothing.
Plenty of people on Twitter think Bakkt is the greatest development to hit the crypto space.
Idk if people realize how HUGE Bakkt is and will be https://t.co/NghHk7Wroh
— Jon Cooke {ŁTC} (@JonCooke17) August 20, 2018
#Bakkt is the most underestimated thing at the moment. Most people don't understand how important this is for #bitcoin. $btc $eth $etc $eos $tron
This man's explanation should help understand a bit why Bakkt is a bullish move for BTC before the EOY.https://t.co/cu2bK4ZwXq
— CryptoNINE (@midnine) August 21, 2018
But the Bakkt solution doesn’t appear to satisfy everyone.
It looks like today's statement was made specfically to address some of the concerns you expressed in your Forbes article on Aug 3rd (https://t.co/UC9B7RlVl6).
— Siamak Masnavi (@siamakmasnavi) August 20, 2018
Caitlin Long, former chairman and president at Symbiont.io, and founder of the Wyoming Blockchain Coalition, penned an article for Forbes expressing her reservations about Bakkt.
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She writes,
“This is a major step in the mainstreaming of bitcoin and cryptocurrencies. But it’s also a double-edged sword, because it’s likely the beginning of Wall Street creating financial claims to bitcoin out of thin air (and not backed by actual bitcoins), which could offset some of Bitcoin’s algorithmically-enforced scarcity.”
Wall Street’s interest in cryptocurrency may be substantially less in the tech and more in its ability to behave like Wall Street – by financializing the digital asset.
Long writes,
“It’s pretty much impossible at this point for anyone to gain control of the Bitcoin network (and likely the other big cryptocurrency networks too), so Wall Street’s only major avenue for controlling them is to financialize them via leverage.
The financial system has perfected the art of leverage-based financialization, unfortunately, and ICE’s announcement about plans to launch a regulated, physical bitcoin futures contract and warehouse (subject to CFTC approval) in November means leverage-based financialization is likely coming to bitcoin in a big way.”
In the short term, Wall Street’s plans on how to profit from Bitcoin isn’t stopping Bakkt supporters on Twitter. It’s also not stopping people from snubbing the painstaking wait for the SEC’s approval of a Bitcoin ETF.
Forget the small #EFT! #Bakkt has already been approved and is launching this year. #BOOM $btc $ltc $etc $eth $ltc $eos $tron $ada https://t.co/9zB4O3kHRd
— CryptoNINE (@midnine) August 21, 2018
I had the pleasure to have lunch with @dan_pantera yesterday. after over 2h of going back and forth on all the hot topics in #Crypto we concluded.
Don't wait for an #ETF
Be excited about #BAKKT #BTC needs more years to mature as an asset classGreat talk
#panteracapital https://t.co/XplQFLWo8C
— the BIG guy (@theBIG013) August 18, 2018
