Bakkt is the brainchild of the New York Stock Exchange owners. By creating a cryptocurrency exchange with US government oversight, Bakkt wants to make trading crypto assets as normal as trading shares.
Bakkt is a service that keeps Bitcoin safe in a secure place. It allows regular investors to invest in Bitcoin while following US government rules. The owner of the New York Stock Exchange wants Bitcoin to become more popular. Bakkt aims to make it easier for big investors to join the world of Bitcoin. This could bring in more money and make Bitcoin more stable.
What is Bakkt?
Bakkt is a service that securely stores large amounts of Bitcoin for institutional investors in cold storage. They used to offer services to regular customers as well, but they stopped doing that in February 2023. Now, they are focusing on providing services to businesses and giving their customers a loyalty experience with the help of SaaS and API solutions.
The parent company of the New York Stock Exchange, Intercontinental Exchange (ICE), owns Bakkt. ICE also offers a Bitcoin futures product with the Bakkt brand, where traders can bet on the price of Bitcoin. The Bitcoin used for these trades is stored securely by Bakkt.
Bakkt manages Bitcoin for ICE, which allows big investors to make bets on it using futures trading. This gives them the chance to buy and sell digital assets in a US government-regulated environment, just like traditional exchanges.
One thing that makes Bakkt different is that it lets trades be settled with Bitcoin, not cash. That means traders get actual Bitcoin when the trade is done, and all that Bitcoin is kept secure by Bakkt. They use a separate record-keeping system to track who owns which Bitcoin, so they don’t have to move the Bitcoin around a lot.
When did Bakkt launch?
Bakkt was announced in August 2018 but didn’t start operating until September 23, 2019. It was created by ICE, which is led by Wall Street executive Jeffrey Sprecher, who also runs NYSE. Sprecher noticed that many traditional investors wanted to invest in cryptocurrency, but they needed it to be regulated properly. So he created Bakkt to meet their needs.
At first, Kelly Loeffler was the CEO of Bakkt, but she left to become a US Senator in late 2019. She was replaced by Mike Blandina, then David Clifton as interim CEO, and finally Gavin Michael, who was previously in charge of technology at Citi.
When Bakkt started, it had a slow beginning. On the first day, only 71 Bitcoin were traded, worth about $700,000. However, trading has increased over time. During the last week of 2020, which was a good time for cryptocurrency in general, Bakkt’s Bitcoin futures had a trading volume of $286 million.
A brief history of Bakkt
What’s so special about it?
How does Bakkt work?
Bakkt provides a platform for institutional investors to trade digital assets and futures based on Bitcoin in a manner similar to traditional currencies and commodities. Additionally, Bakkt offers warehouse storage for the secure storage of Bitcoin by keeping customers’ private keys offline to increase security and protect against hacking.
To address the issue of the blockchain’s slow speed, Bakkt uses its own separate ledger to record transactions within the warehouse, which reduces the need to record every single movement on a blockchain. Only assets entering or leaving the warehouse are recorded on the blockchain. As a result, the platform operates on a layer above the blockchain, according to Bakkt’s CEO Sprecher.