What Will Bakkt Do For Crypto?

In August, crypto changed forever.

The Intercontinental Exchange, operator of the world’s largest stock exchange, launched Bakkt, a global cryptocurrency platform allowing private and institutional investors alike to buy, sell, store, and spend digital assets like Bitcoin. The platform is also paving the way for one-day bitcoin futures and BTC warehousing, meaning they’ll be purchasing huge amounts of Bitcoin to back up their bitcoin investment vehicles and keeping those funds out of circulation. Many feel that ETFs won’t be long on the way given that such a major institution has stepped up to the plate and made a stance on crypto.

According to the announcement, Bakkt is an open ecosystem launched in partnership with BCG, Microsoft and Starbucks. The idea is that investors used to logging into brokerage accounts won’t need to go through the pretty cumbersome process of trying to figure out what to do with public and private keys, how to set up a crypto exchange account, etc.

Bakkt mainstreams crypto in a way that hasn’t been done before on this scale, and offers insurance and other safeguards that institutional investors will require before getting involved. ICE customers can now trade Bitcoin on the global market just like stocks.

Having said that:


The CEO has stated that the platform is more for long term investors who want to buy bitcoin – or rather, bitcoin contracts, given that Bakkt will be holding the bitcoin and not investors.

Important: Investors aren’t buying Bitcoin, Bakkt is

Just to make that clear – what Bakkt sells is actually exposure to Bitcoin price movement, not the actual cryptocurrency itself. Sounds familiar, right?

Wrong – this is a whole new ball game. Unlike other services offering futures contracts, Bakkt is offering direct exposure as opposed to indirect exposure – yes, the investors that don’t buy any Bitcoin and are essentially gambling on the price action. However, the contracts are all pre-funded, meaning Bakkt actually buys the Bitcoin first and then allows investors to buy exposure making it a backed investment vehicle quite unlike other services like CBOE futures.

Many prominent figures see the Bakkt evolution it as both a positive and inevitable change.

Fundstrat’s Thomas Lee referred to it as “a roadmap that shows major institutions are creating supporting infrastructure for crypto.”

He pointed out in a Twitter thread that Bakkt came with several advantages. While it is much the same in many ways as buying from Coinbase or Binance:

“ICE already has existing and approved trading relationships with banks like JP Morgan etc and means that this is a natural pathway for traditional retail investors to access Bitcoin via their brokers. ICE is owner of the New York Stock Exchange.”

Lee added that ICE has revenues of $6 billion and assets of $85 billion, dwarfing any major crypto exchange out there by a wide margin and leaving it as a highly secure and liquid counterparty in terms of financials, albeit a centralized one controlled by Wall Street execs.

Good or Bad?

It’s a complex situation. While Lee is all for it, other figures like Wall Street vet Caitlin Long and ‘Bitcoin Godfather’ Andreas Antonopoulos aren’t so keen on Wall Street sticking its nose into crypto.

Subtle and insidious is how that tweet continues, in case you were wondering.

Long points out that two terms, rehypothecation and commingling, are about to become more relevant to crypto due to Bakkt, and they don’t spell good news. Here’s what they mean.

Commingling means that the CCP or custodian will hold client collateral (bitcoins, in this case) in a commingled, or “omnibus account,” rather than segregating them for each client in their own wallets.

Rehypothecation, on the other hand, is the process by which a lender receives an asset as collateral for a loan, and then pledges that collateral to cover its own exposure to a separate party, which then pledges that same collateral to a different party, etc.

You see banks doing this all the time, and it’s precisely what led to the 2008 banking crash – bankers literally passing the buck around until a maelstrom of unpaid, nearly impossible-to-track debt collapses the entire system.

This means traditional banking practices now have a major foothold in the Bitcoin markets, and Long believes that treating the decentralized cryptocurrency with fractional reserve banking techniques goes against the very reason Bitcoin was supposedly created in the first place.

So we’ve heard some of the negative aspects:

What’s good about it?

Banking practices also means all the usual bells and whistles that go with it which crypto is of course sorely lacking in. Derivatives, custody solutions, asset-tokenisation systems, merchant and consumer applications.

Founder and Chairman and CEO of Intercontinental Exchange Jeffrey C. Sprecher said that building a connected infrastructure would help build “confidence” in crypto asset class on a “global scale” consistent with the company’s track record of bringing transparency and trust to “previously unregulated markets.”

Of course – the whole point of Bitcoin was that it’s trustless, right?

The main bonus, if it plays out that way, is that the market cap could be abouut to totally explode which may contribute to another bull run, and that’s what has everyone who supports Bakkt so excited.

There’s no denying that Wall Street investment could be good for the price movement. However, die-hard crypto believers are likely to feel that this is essentially a commercialization of cryptocurrency that will only serve to regulate it to the point of being nearly indistinguishable from fiat currency.

Andreas Antonopoulos touched on this when he explained his thoughts on why ETFs are a bad move for Bitcoin, citing the potential for market manipulation as the main concern.

“If there is ever a fork debate, which is very likely to happen again in any cryptocurrency, then the fund that controls that Bitcoin now has a very large voice. Their shareholders don’t. They don’t get to choose which fork the fund is going to follow in a Bitcoin debate…

We already saw that level of influence during the August 1st fork, user activated software forks, Bitcoin cash, the scaling debate… Large custodial exchanges had a very strong voice in the ecosystem. They were able to decide if they were going to support or not on behalf of 10 million customers… an ETF will do that and it will do that on an even bigger scale”

OK, OK. That was more negative stuff, and I think we get the picture there.

Bakkt brings with it traditional banking practices that could put a lot of power and manipulation capabilities into the hands of the bankers, but it could boost the market cap. Is that it?

That’s not all

Apart from the market cap, Bakkt could really help with general adoption, no question. It makes crypto easier to access, something that really could bring in a lot more new investors. As well as sending everything on a moon mission, anyone who wants crypto to succeed wants to see it widely adopted and provided as a payment solution in stores and services. Bakkt will raise crypto’s profile and perhaps lead to more merchants worldwide accepting crypto.

As well as that, Bakkt facilitates tokenization of more assets. The name even hints at the idea of things being “backed” by crypto, and the tokenization of everything is an exciting concept that we’ve talked about here at Crypto Is Coming before.

Art, real estate, and other forms of physical property can be digitized and sold as tokens, enabling regular people to invest in things that were previously for the elite only.

All this change spells more interesting ideas and innovation, more adoption, more real use cases, and more money in the space.

But at what cost? How much of the core ideas behind the invention of cryptocurrency will be traded away to facilitate the new era of crypto?

We’ll have to wait and see, because there’s not much else we can do about it. Like it or not, it’s already on its way.

Remember folks, Crypto is comin!

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Interested in other cool crypto posts….check out Is Mass Detokenization on the way?and Bitmain IPO could be massive!.

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The Raven’s Dispatch – August 7, 2018 – Thieves Steal Over $5 Million BTC by Hijacking SIM Cards

It seems like every week someone elses crypto gets stolen

Once again hackers find creative to hack up to $5 million from unsuspecting people. 40 people to be exact. And the cheeky hacker even had the stones to hack phones at Consensus. This hacker is my kind of scum. This is the first known form of this hacking, known as Sim Hacking, in order to steal crypto currency. What is Sim Swapping? A mobile phone SIM card stores user data in Global System for Mobile phones. Without a SIM card, GSM phones aren’t able to tap into any mobile network. The hacker will trick the mobile network service and have them transfer mobile phone numbers of targets onto a SIM card which is held by the criminal.

One the number has bene obtained the hacker has access to reset any passwords on the phone and gain access to online accounts or cryptocurrency exchanges. And voila, stolen crypto. Joel Ortiz, the antagonist of our story, even stole millions from Consensus in may of this year. Joel was captured trying to escape to Europe and now faces 28 charges. The full Motherboard piece is worth the read. Be safe out there familia. Now it’s time to engage the Dispatch! (better intro?…I didn’t think so).

Contrary to what many in the community thought, 2018 is not our year. But there are still four months left right? Plenty of time for a turn around. The overall cryptocurrency market kicked us in the gut the past week moving from $271bln to $232bln representing a 15% decline since the last Dispatch. And like lemmings the top five also went over the cliff.

Bitcoin (BTC): It get this acute sensation week to week, as I put this thang together, that i’ve seen this story before. Bitcoin dropped 14% the past week suffering a steep decline Tuesday evening. As of this post BTC is settling (we hope) at $6500 .

Ethereum (ETH): I’m gonna make this short, because I think we all know what’s coming: 13% decline, dropping from $423 to $369. We all feel the pain.

Promether (PYRO): Founded in August 2017, Promether is a new type of network called an Adaptive Symbiotic Network (ASN). It works on three principles: network, application and users. The outcome is simple, providing security to everyone. The foundation of this network is based on AI with the use of ubiquitous computing.

That’s quite the mouthful, and pretty ambitious. But in this hyperconnected world security should be everyones primary concern. The list of features is long but one recuriing theme sticks out throught the whitepaper: security, encryption,

Promether is currently holding a private sale which closes upon raising $7 million. Currently in its second phase, it has already raised millions by offering it’s native coin (PYRO) and bonuses to early investors. Promether plans to have a public ICO in the near future once its minimum viable product, Contact, is ready for launch.

If you want to know more about Promether check out our guide.


BTC vs. BCH: Let’s get ready to rumble– We take a look at the advantages and disadvantages of each coin, examine the value proposition, branding and level of decentralization in this piece.

What is Promether? – We take a look into this project aiming to provide us better security and anonimity on the internets. With all the hacking and loss of personal data it’s time we have take a different look at security.

LATOKEN’s CEO Believes Tokenized Assets are The Future – The young multi-asset exchange has announced Bitcoin deposits and withdrawals are now enabled. Given the fact the Japanese Yen is the second most traded fiat currency with Bitcoin, the company hopes this move will accelerate that market’s penetration.

Exclusive: ABCC Exchange is Launching Its App This Week – The Singaporean exchange has recently issued its ABCC Token (AT), and it’s now getting ready to launch its smartphone app. I spent some time playing with the test app, and I can say I was pleasantly surprised.

Bitcoin: Uncorrelated assets, the “holy grail” of portfolio allocation – When it comes to investments of any kind, it’s important to understand how the assets in question are related to others on the market. Bitcoin offers traders a lifeboat when things turn rough by being uncorrelated to the stock market

Bank in Myanmar To Integrate Blockchain For Its Migrants in Thailand – Myanmar’s Shwe Urban & Rural Development Bank has partnered with Everex, a financial technology (fintech) company to develop a blockchain-based digital remittance service between Thailand and Myanmar.

Is Ethereum Classic About To Make Its Move? – With a clear roadmap and team, deep pocket investors and strong support in Asia, is Barry Silberts long on ETC about to pay off?

– A lot of commotion this morning in the crypto streets. First news broke that New York Stock Exchange’s parent company ICE will launch new futures contract that delivers real bitcoin.  It also seems Coinmarketcap got a little too excited by this and began displaying prices over 10x! At this point, we’re not sure if this is related to a hack on their site or their price providers.

Top 15 upcoming ICOs (August 2018)  – Another great infographic from @ico_analytics showcasing some of the highest rated upcoming ICOS based off reviewers data points. Check it out!

Exclusive: LATOKEN’s CEO Isn’t Scared of His Bigger Competitors – In an exclusive interview for Crypto is Coming, Valentin Preobrazhenskiy, LATOKEN’s founder and CEO, talked about how the exchange came to be, his thoughts on its competitors, and its future goal.

India Doubles Down on Blockchain-Powered Hubs With Its New Initiative – The country has made clear it is ready to embrace blockchain, and it isn’t afraid to show it. Officials have recently announced India will be developing a ‘blockchain district’ in the Indian state of Hyderabad.


SEC Postpones Decision on Bitcoin ETF Listing to September – Ahhhhh, a life line. Or is it? The U.S. Securities and Exchange Commission has postponed a decision on whether to allow the listing of an exchange-traded fund backed by Bitcoin.

Duo Security researchers’ Twitter ‘bot or not’ study unearths crypto botnet – A team of researchers at Duo Security has unearthed a sophisticated botnet operating on Twitter — and being used to spread a cryptocurrency scam…..TIf you use twitter for anything crype related then you’ve seen the ETH bots. This is so anticlimactic.

Goldman Sachs Is Planning a Crypto Custody Service – Goldman Sachs Group Inc. could offer a boost for the burgeoning universe of funds betting on cryptocurrencies.

Bitmain Confirms New Crypto Mining Facility in Texas – Chinese mining giant Bitmain confirmed that it is set to open a new cryptocurrency mining facility in Rockdale, Texas, USA.

Money or Assets? How World Governments Define Cryptocurrencies – Cryptocurrencies — what are they? Money? Commodities? Securities? Utility tokens? Or something else? Few national governments seem to be in any kind of agreement on this question, and for now, at least, their divisions have given such currencies as Bitcoin and Ethereum a floating, indeterminate status on the global stage.

Coinbase Custody is Exploring the Addition of 37 New Assets – San Francisco-based exchange and wallet service Coinbase announced today, Aug. 3 that it is exploring the addition of 40 new assets to its custodial service, Coinbase Custody.

The NYSE’s Owner Wants to Bring Bitcoin to Your 401(k). Are Crypto Credit Cards Next? – Backed by Microsoft and Starbucks, Intercontinental Exchange is launching a startup called Bakkt to make the cryptocurrency safe for your retirement fund, and maybe for retail, too.

Mt Gox Creditors Prepare Revised Claims for Bitcoin Repayments Plan – In 2014, Mt Gox exchange handled an estimated 70% of the total Bitcoin supply until a security breach led to the loss and/or theft of approximately 850,000 BTC, worth $450 million at the time and billions today.

Six Reasons Why Institutional Investors Could Flock to Crypto in 2019 – A dude at Forbes who look pretty intelligent lays it down for us, guys.

Binance Makes First Public Aquisition: Anonymous Wallet for Ethereum Tokens – Binance, the world’s largest cryptocurrency exchange by volume, has officially made its very first public acquisition: Trust Wallet – an anonymous mobile storage solution for Ethereum-based tokens.

US Treasury Dept. Fintech Innovation Report Touches on Crypto, Blockchain – A major new report from the U.S. Treasury Department published July 31 has called for a more agile and conducive regulatory approach to innovations in the fintech sector.

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