Crypto Futures Alternative ‘Bakkt’ Delayed—But Gets Big Investments
The launch of Bakkt, a crypto futures trading platform, has been delayed once again. Bakkt’s attempts to gain a green light from regulators have stalled temporarily, possibly due to the current shutdown of the U.S. Government and/or delays within the regulatory body that Bakkt is working with.
This means that Bakkt will not go live at the end of January as was originally planned. Prior to that, the platform’s launch was slated for mid-December, making the new delay even more significant than it otherwise would have been.
However, the number of roadblocks that Bakkt is facing is not entirely surprising, as the project is working within a highly regulated and unexplored space.
Bakkt serves as a cryptocurrency futures trading platform and provides an alternative to exchange-traded funds (ETFs). These areas are largely of interest to institutional investors, and they represent an untapped market for the crypto world.
Unfortunately, over the past year, several crypto ETF platforms have been rejected by the SEC due to their potential for market manipulation and fraud. This has led many projects to propose an alternative solution. Bakkt attempts to avoid some of the problems that the SEC has outlined by eliminating margin trading and leverage trading.
Instead, Bakkt introduces physical settlement and collateralization to futures trading. Trades that take place on the platform result in Bitcoin being “physically delivered” to the Bakkt warehouse. In other words, Bakkt ensures that its trades are backed by real assets — or “bakkt” by those assets, if you will.
So far, this approach seems to be wooing regulators, and Bakkt has made more progress than most other projects. Currently, Bakkt is working with the U.S. Commodity Futures Trading Commission (CFTC), which has the ability to permit the launch of the platform.
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Despite Bakkt’s achievements, a launch date is still uncertain. Although the CFTC’s approval process seems to be drawing to a close, Bakkt has reported that the process is still ongoing. It is unclear whether the delay is due to the capacities of the CFTC or due to new regulatory issues that have arisen. The new notice simply states:
“[We expect] to provide an updated launch timeline in early 2019, for the trading, clearing and warehousing of the Bakkt Bitcoin (USD) Daily Futures Contract. The launch had previously been set for January 24, 2019, but will be amended pursuant to the CFTC’s process and timeline.”
In other regards, it seems that things are going quite smoothly for Bakkt. The project recently announced that it has received $182.5 million from its partners and investors, including Microsoft’s venture capital arm. This means that Bakkt holds plenty of promise and could be a driving force for institutional investment in crypto―once it is finally released, that is.
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