Intercontinental Exchange (NYSE: ICE) is a well-known Fortune 500 company that plans to make history this year. ICE is the world’s biggest stock exchange operator, owner of NYSE, and is a leading operator of global exchanges, clearing houses, data and listing services. They are well respected and are now planning to form a new company; Bakkt. By creating Bakkt, ICE wants to make cryptocurrencies mainstream. However, how will they accomplish that, and do they have the means to do so?
Bakkt will be an ecosystem, along with several partners and if they succeed it could be a significant step in making cryptocurrencies more attractive and mainstream. ICE intends to leverage Microsoft cloud solution to create an open, regulated and global ecosystem for digital assets. Bakkts first use cases will be for the trading of Bitcoin versus fiat currencies, as Bitcoin is today the most liquid digital currency. The effort is designed to address evolving needs in the estimated $270 billion digital asset marketplace. Their CEO made the following statement:
“Bakkt is designed to serve institutions, merchants, and consumers, to build confidence in the asset class on a global scale, consistent with our track record of bringing transparency and trust to previously unregulated markets,” Jeffrey C. Sprecher, CEO of ICE.
Bakkt not only aims to bring cryptocurrency to mainstream investors, but it also seeks to disrupt the world of retail payments by moving consumers from credit cards to bitcoin apps.
They are working with some big names including BCG, Microsoft, and Starbucks to create an integrated platform that enables consumers and institutions to buy, sell and spend digital assets all around Bakkts global network. They have also got some early-stage investors including Fortress Investment Group and Susquehanna Group.
“As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into US dollars for use at Starbucks,” said Maria Smith, Vice President, Partnerships, and Payments for Starbucks.
Is this not what we have been waiting for? Well, according to Forbes, it is a double-edged sword. The facts I have stated above are the positive part, but by creating physical Bitcoin futures contracts, they are building a financial asset that will bring leverage to Bitcoin in a big way. This means that the investments are not fully backed by Bitcoins. This matters since Bitcoin has algorithmically-enforced scarcity, and that’s a big part of what gives it value. If Wall Street begins to create claims to bitcoin out of thin air, unbacked by actual Bitcoin, then Wall Street might succeed in offsetting that scarcity to some degree.
However, Starbucks statement confirms that the coffee giant is interested in what blockchain can do for them and many companies will be watching the progress. Moreover, if ICE is creating Bakkt, be sure more giants are looking to do the same.
The price might be going down but investments in blockchain are rising, applications for digital currencies continue to develop, and the number of apps designed in 2018 has already exceeded the amount of 2017 according to KPMG. The Launch date is set for November 2018, will this be the turning point for cryptocurrencies?
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Dennis Sahlström has been trading and investing since 2012 and has for the last two years been consistently profitable. He has been in the crypto- and blockchain space since the middle of 2017 and realized its potential for our world, not least how it is transforming the society we live in. He has now created an education platform, together with the wealth coach Marcus the Maria. They teach regular people how to invest and trade in the cryptocurrency market with proven strategies. If you want to learn more and feel like its time to get into this new asset class, download our free book and register to the next live training to get your future in cryptocurrencies started.