Bakkt to Provide Bitcoin Custody but Its Product Raises Questions, Crypto Coins News

• Bakkt launched its institutional custody services.
• The Bakkt Warehouse launched with a robust insurance policy and a range of clients.
• Bakkt’s daily trading volume is picking up.

Bakkt, a bitcoin futures exchange backed by the Intercontinental Exchange (ICE), announced that it is launching custodial services for institutional enterprises. This is not the first organization to provide bitcoin custody, but the firm believes that it would set the stage for the mass adoption of the technology.

The Bakkt Warehouse

In a blog post,Bakkt announced that it received authorization

from the New York Department of Financial Services (NYDFS) to offer bitcoin custody to all institutions. Now, the Bakkt Warehouse is open to all clients around the world who are looking to secure their bitcoins. According to the firm, this was the missing link in the institutional adoption of bitcoin.

A critical link – perhaps the critical link – in the institutional adoption of bitcoin is custody. When investors have ready access to regulated custodians whose security and processes they trust, the full potential of this emerging asset class and technology can flourish.

With a $ 125 million insurance policy, the Bakkt Warehouse will begin offering its services to a range of clients. These clients include Pantera Capital, Galaxy Digital, and Tagomi. More clients are set to be onboarding in the coming weeks.

Custody Services Market

Despite entering the custodial services market with big names behind it, the Bakkt Warehouse is not the only one with such clients.

Fidelity Investments, one of the world’s largest financial services providers with more than $ 7.2 trillion in client assets under administration,launched Fidelity Digital Assets in October. This is an enterprise-quality custody and trade execution services for family offices, financial advisers, and hedge funds.

Additionally, Coinbase, which has been one of the leading exchanges in the industry for over seven years,launched its custodial services in 2018. Now, Coinbase Custody manages over $ 7 billion worth of 30 of the top cryptocurrencies by market cap.

Bakkt Picking Up Steam

The fierce competition in the market continues increasing as more companies join the space. But *** bakt is starting to gain traction.

Even though the firm’s physically settled bitcoin futures contracts had alow start with only 71 positions staked, they have managed to recover. On Nov. 9,Bakkt saw its monthly futures volume set a new daily recordof 1, 756 contracts, worth over $ 15 million. The last time the company’s monthly futures volume spiked was on Oct. 25, with 1, 179 contracts traded that day alone.

As the ICE-backed company begins to see its efforts pay off, some analysts in the industry are questioning their products. According to Twitter user Ugly Old Goat, who has more than 10, 000 followers ,Bakk’ts physically settled bitcoin futures contracts are not what they appear to be

Ugly Old Goat stated:

You deliver Bitcoin on Bakkt, get their receipt, sell it, and get dollars. You buy Bitcoin on Bakkt, and you get Bakkt warehouse receipt. They do not deliver Bitcoin to your private address. It is an off-ramp without an on-ramp.

Although the trader has been trying to contact the Bakkt team, he has yet to receive an answer. A Twitter user under the pseudonym moorsc0desaid that users never get their bitcoins backsince it just goes back and forth inside trading accounts.

It remains to be seen whether Bakkt will let its customers withdraw their bitcoins into the wallet of their choice.

This article was edited by Gerelyn Terzo.

Last modified: November 11, 2019 22: 55 UTC