The launch of Bakkt, an Intercontinental Exchange-backed platform offering physically-settled bitcoin futures, has been delayed. What’s going on?

One of the most hotly-anticipated developments in the crypto sphere has been Bakkt, an initiative launched in partnership with NYSE owner Intercontinental Exchange (ICE). Bakkt has taken over from a bitcoin ETF as the great hope to drive the next bull market. The platform was originally supposed to launch in December, but was delayed until 24 January – allegedly due to ‘the volume of interest in Bakkt’.

However, this was dependent on regulatory approval by the CFTC, and it looks like Bakkt’s launch has been another victim of the US government shutdown, which has stretched on far longer than any previous shutdown and longer than most critics imagined possible. It’s currently unclear when Bakkt will open its doors. The company made a point of developing its platform in strict secrecy for 14 months, and keeps its cards close to its chest; it makes occasional major updates but doesn’t pander to the day-to-day ‘when moon?’-type clamour from the crypto faithful (and who can blame them?).

In the meantime, Bakkt have been busy raising money – $182.5 million, from 12 strategic partners including Pantera Capital, Microsoft’s VC arm and ICE itself. They are also in the process of acquiring ‘certain assets of Rosenthal Collins Group (RCG), an independent futures commission merchant with nearly 100 years of earning clients’ trust.’ These assets will ‘enhance our risk management and treasury operations with systems and expertise. Other aspects of the transaction will contribute to our regulatory, AML/KYC and customer service operations as we help enable digital asset acceptance by bringing more choice and control to buyers and sellers.’

Bakkt themselves have not said when they expect to launch, and presumably they’re not prepared to guess; it’s ‘awaiting CFTC approval’, and that’s out of their control thanks to the spat over a very long wall along the border with Mexico. (That hasn’t stopped other sources trying.) ICE’s last update on 31 December read, ‘The launch had previously been set for January 24, 2019, but will be amended pursuant to the CFTC’s process and timeline.’

Right now, the best guess is: wait for the US government to reopen, and expect an update within days of that. There is a 30-day public comment period, but until 22 December, when the shutdown started, Bakkt was still tentatively working to its 24 January schedule. Given the previous timeline, we can probably expect Bakkt to launch a little over month or so of the shutdown ending – whenever that is.

As a final point, it’s worth noting the continuing uncertainty in the cryptocurrency markets. It’s unclear whether bitcoin has bottomed. By the time Bakkt is able to launch – very likely some time in March or possibly April now – the situation could be very different, sentiment will likely have shifted and the platform could leverage renewed confidence to get off to a flying start. The shutdown hasn’t been great for Bakkt, but there could be a silver lining.

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