Bakkt, the cryptocurrency derivatives exchange initiated by Intercontinental Exchange (ICE), has officially begun operations. According to official sources, the physically settled Bitcoin futures contract market started at 8:00 PM Eastern Time on September 22, with the first Bitcoin futures contract trading at $10,115.
The journey from Bakkt’s initial proposal to its official launch has been eventful. Despite high expectations, it has faced significant challenges. For many investors in both cryptocurrency and traditional finance, this launch represents a milestone.
While Bakkt is often discussed in broad terms, many are unfamiliar with the specifics. Here are five key aspects that shed light on Bakkt’s significance and potential impact.
Backed by a Financial Giant: Intercontinental Exchange (ICE)
Bakkt’s most prominent advantage is its affiliation with Intercontinental Exchange (ICE), one of the world’s largest financial market operators.
ICE operates 14 securities and futures exchanges, including the New York Stock Exchange (NYSE), and five clearinghouses. Its global network spans renowned venues such as the Canadian Futures Exchange, the Paris Stock Exchange, and the London International Financial Futures Exchange.
In 2018, ICE reported consolidated net revenue of $5 billion, making it the highest-grossing exchange operator globally. This marked its 13th consecutive year of record revenue.
With a client base that includes thousands of trading firms across more than 70 countries, ICE provides Bakkt with unparalleled reach and credibility. This backing suggests that Bakkt’s services could eventually extend to most major global markets.
Regulatory Endorsement and Compliance
Bakkt’s path to launch involved extensive engagement with U.S. regulators. Initially proposed in August 2018, its launch was delayed multiple times due to regulatory hurdles, leading some to speculate that the project might never materialize.
However, in June of this year, Bakkt announced it would begin testing Bitcoin contracts in July. Then, on August 16, it confirmed that its futures contracts would officially launch on September 23—a announcement met with enthusiasm across the cryptocurrency community.
A major breakthrough came in August, when Bakkt received approval from both the U.S. Commodity Futures Trading Commission (CFTC) and the New York State Department of Financial Services (NYDFS). The latter’s BitLicense is widely considered one of the most difficult cryptocurrency licenses to obtain in the United States. Bakkt’s success in securing these approvals underscores its compliance-focused approach.
Bridging Traditional Finance and Cryptocurrency
For much of the past decade, Bitcoin and other cryptocurrencies remained on the fringe of mainstream finance. However, recent market developments and growing institutional interest have begun to change this perception.
Bakkt serves as a gateway for individual and institutional investors to enter the cryptocurrency market securely. Its investor lineup includes prominent names such as Microsoft’s venture arm M12, Naspers (a major shareholder in Tencent), Boston Consulting Group, Horizons Ventures (backed by Li Ka-shing), and firms like Galaxy Digital and CMT Digital. In its first funding round, Bakkt raised $182.5 million.
Another significant partnership is with Starbucks. The coffee giant will integrate Bakkt’s payment software into its U.S. stores, allowing customers to convert cryptocurrencies into fiat currency for transactions. With over 15,000 locations in the U.S. alone, this move could significantly boost cryptocurrency adoption among everyday consumers.
Impact on Bitcoin’s Market Dynamics
Many anticipate that Bakkt’s launch will positively influence Bitcoin’s price. Since the August announcement, Bitcoin’s price has experienced fluctuations, rising from around $9,000 to a peak of $10,900 before settling into a narrower range.
However, the immediate impact may be more nuanced. Rather than triggering dramatic short-term price increases, Bakkt could contribute to greater price stability. Historically, Bitcoin’s volatility has made it challenging for large institutional investors to enter the market. With regulated platforms like Bakkt, Bitcoin may become more palatable to Wall Street, potentially reducing extreme price swings and enabling broader participation.
This stabilization could encourage long-term investment strategies rather than speculative short-term trading.
Pioneering a New Era in Finance
Bakkt introduces two innovative features that distinguish it from existing cryptocurrency exchanges.
First, it adopts a traditional brokerage model tailored for institutional investors. Similar to equity trading, Bakkt handles clearing between brokers, effectively treating Bitcoin as a new asset class within conventional portfolios.
Second, and more importantly, Bakkt uses physically settled contracts. This means traders must deliver actual Bitcoin upon contract expiration, unlike cash-settled alternatives where positions are closed using fiat equivalents. To support this, Bakkt launched the Bakkt Warehouse earlier this month, allowing users to store Bitcoin securely. This approach limits naked short-selling and promotes market integrity.
As Bakkt gains traction, it is likely to attract more participants into the cryptocurrency ecosystem. Its launch signals broader acceptance of digital assets within the U.S. financial system and provides a compliant framework for widespread investment.
On its website, Bakkt states: “We enable consumers and institutions to seamlessly buy, sell, store, and use digital assets. We believe that digital currencies will transcend their role as speculative instruments and become integral to the global economy.”
With its official launch, Bakkt is poised to become a significant chapter in the history of modern finance.
Frequently Asked Questions
What is Bakkt?
Bakkt is a regulated cryptocurrency derivatives exchange launched by Intercontinental Exchange (ICE). It offers physically settled Bitcoin futures contracts, meaning actual Bitcoin is delivered upon contract expiration.
How does Bakkt differ from other crypto exchanges?
Unlike many exchanges, Bakkt uses a physically settled model, requires实物交割, and operates under full U.S. regulatory compliance. It also integrates with traditional financial infrastructure, making it accessible to institutional investors.
Why is Bakkt considered important for Bitcoin?
Bakkt provides a regulated and secure environment for institutional players to trade Bitcoin. This could reduce volatility, increase liquidity, and encourage long-term investment in cryptocurrencies.
Can individuals use Bakkt?
While initially focused on institutional clients, Bakkt’s infrastructure may eventually support broader access. Its partnership with Starbucks also aims to facilitate consumer-level cryptocurrency transactions.
What impact does Bakkt have on Bitcoin’s price?
In the short term, Bakkt may contribute to price stability rather than dramatic increases. Over time, it could help legitimize Bitcoin as an asset class and attract significant institutional capital.
Is Bakkt available globally?
Currently, Bakkt is available to U.S.-based participants, but its parent company ICE has a global presence. Expansion to other regions may follow based on regulatory approvals. 👉 Explore more about regulated crypto trading