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Bakkt Exchange: The Story from Behind the Stage

After many delays, on Monday, 22nd July, crypto trading platform Bakkt finally launched the user acceptance testing. Bakkt is owned by Intercontinental Exchange who also owns the New York Stock Exchange. CEO of Bakkt, Kelly Loeffler who joined ICE in 2002 quit as the executive of ICE communications and marketing last year to work full time on Bakkt. Launch of Bakkt bitcoin futures trading platform was among the most anticipated launch of the year. COO of Bakkt Adam White in a series of tweets announced the launch of Bakkt. The company intended to launch Bitcoin futures contract in November of 2018 but due to regulations and approval from the Commodity Futures Trading Commission (CFTC) took time and delayed the launch many times. In a blog, Adam White mentioned that Bakkt is eying $100 million in insurance, and it will be separately governed from ICE.

Bakkt has big names backing it.

Ninety years old Li Ka-Shing, owner of Horizon Ventures whose net worth is estimated around 34 billion dollars has also invested in Bakkt. The potential of Bakkt has attracted the eyes of people like Bill Gates and Howard Schultz, who have indirectly invested in the project through their firms. Investments from some of the world’s wealthiest businessmen could help make cryptocurrencies mainstream. The cryptocurrency industry has not seen big names like Bill, Gates, Howard Schultz and Jeff Sprecher getting involved before. Galaxy Digital, Pantera Capital, Naspers’ fintech arm (PayU), Protocol Ventures, Boston Consulting Group, CMT Digital, Eagle Seven also invested in the project. In total Bakkt raised $182 million in investments.

Even though Bill Gates in the past has openly criticized the cryptocurrency in general, during an Ask Me Anything session on Reddit, he said that cryptocurrency is killing people in a direct way, referring to use of digital currency in terrorism funding. That remark by Gates was highly debated in the crypto world.

Jeff Sprecher; The man behind all

Kelly Loeffler and Jeff Sprecher
Kelly Loeffler and Jeff Sprecher

Jeff Sprecher owner of ICE married Kelly Loeffler in 2004 who is now CEO of Bakkt. Jeff started ICE in 2000 as an online marketplace for energy trading in Atlanta. Since then his firm has gone to acquire companies like International Petroleum, New York Trade, Creditex and many more. And with Bakkt it has also entered in the crypto industry.

New York Stock Exchange Chairman, is also known to advocate the use of cryptocurrencies around the world, even before he was involved with Bakkt. Last year Jeff spoke at the Consensus Invest conference in New York about the future of cryptocurrency.

Bakkt hired former Google and Paypal employee.

Mike Blandina
Mike Blandina

Bitcoin futures exchange Bakkt, in April, hired Mike Blandina, as its chief product officer. Mike previously worked with Google and helped with Google’s payment app. He has also served as head of payments and credit engineering at PayPal. CEO, Kelly announced his welcome in the company in a blog. She mentioned Mike’s experience would help them create Bakkt’s payment app.

Bakkt will use Microsoft and Starbucks to gain global userbase.

Microsoft and Starbucks
Microsoft and Starbucks

According to Bakkt, CEO Kelly Loeffler, partnership with Microsoft and Starbucks is very crucial for the success of this project. Vice President of Starbucks Maria Smith said that Starbucks will help users to convert digital currency into fiat and would sell their product. It is also Bakkt’s first retail merchant.

Microsoft’s Azure, which is their cloud computing software, is also being used to run Bakkt. New York Stock Exchange which is also owned by ICE also runs on Microsoft technology

The trading company’s strategy to involve big names like Microsoft and Starbucks is a clear indication to expand their business globally. CEO, Kelly also mentioned that companies like Microsoft and Starbucks getting involved in the crypto business would help the industry overall. They can help bring more credibility to digital currency in the eyes of people and hence increasing the demand for it.

Despite being backed by big names, Bakkt faced heat from regulators.

Even with so many big names backing the company, it had to go through under scrutiny before its first user acceptance testing this month. The initial plan of the company was to launch the bitcoin futures contract to people in November of 2018. But regulators like Commodity Futures Trading Commission and others did not approve it till late June of this year. The future of Bakkt was in the dark for a while when delaying in launch happened in March for the 3rd time. The delays only increased the anticipation of the launch of the company. According to industry insiders, Bakkt was being hailed as a project that would affect the crypto market, and the price of bitcoin would see growth once again. As of now, the company has got all the approvals from regulators and have started the test project which COO, Adam White compared to “moonshot bet.” After the test project, highly-anticipated Bakkt will be available for people around the world to buy, sell, and store digital currency through the app.