Bakkt Warehouse to feature warm & cold wallet insurance

As we speed into the US holiday season and toward year-end, there’s no shortage of progress at Bakkt. Our efforts over the last few weeks have resulted in important new features to support our offering, so I wanted to provide an update on what’s in flight.

First, our team is hard at work with customer onboarding and securing regulatory approvals. We’re focused on helping participants prepare for our launch, and we appreciate the tremendous collaboration among our clearing firms and customers.

On the regulatory front, we continue to work closely with the CFTC as they conduct their thorough review of the Bakkt™ Bitcoin Daily Futures contract and the Bakkt Warehouse. These products represent a critical shift in the evolution of crypto markets toward more accessible, useful, and regulated instruments.

The level of collaboration at the exchange, customer, and regulatory levels are unprecedented in terms of engagement and effort in the institutional cryptocurrency markets. We are also fortunate to now have Adam White on board as our COO as we work through our launch and establish our roadmap for the year ahead.

Given the volume of interest in Bakkt and work required to get all of the pieces in place, we will now be targeting January 24, 2019 for our launch to ensure that our participants are ready to trade on Day 1. As is often true with product launches, there are new processes, risks and mitigants to test and re-test, and in the case of crypto, a new asset class to which these resources are being applied. So it makes sense to adjust our timeline as we work with the industry toward launch.

Second, as we collaborate to help develop this asset class, we are taking opportunities in our start-up phase to expand our offering. We’ll share more about some of these new features in the coming weeks but as a start, I’m pleased to announce that we have insurance for bitcoin in cold storage and are in the process of securing insurance for the warm wallet within the Bakkt Warehouse architecture. We are focused on every aspect of delivering an institutional grade crypto warehouse solution and believe this is a significant step in building confidence in this asset class.

Finally, some of our best feedback comes in the form of questions, so I wanted to share a selection of those we’ve heard most often, and our responses:

Question: Why are you starting with bitcoin, and will you add other digital currencies?

Answer: Bitcoin today accounts for over half of total crypto market capitalization and has been deemed to be a commodity, and its derivatives are regulated in the US by the CFTC. As the world’s most liquid and widely distributed cryptocurrency, and where we’ve seen the most customer demand, bitcoin’s profile creates a liquid product on which to build a futures contract. We’ll consider additional contracts as the landscape evolves and as we receive additional customer feedback about what they want and need.

Question: How is the price of bitcoin going to be established?

Answer: Given the transparency and regulation of the futures markets, the futures price in a one-day physically settled bitcoin contract will serve as a price discovery contract for the market. There is no reliance on cash platforms for settlement prices for pricing the daily bitcoin futures contract.

Question: When will trading and warehousing begin?

Answer: We expect the contract to launch on January 24, 2019, subject to regulatory approval. We’ll continue to update you on our progress and milestones.

Question: Is Bakkt hiring?

Answer: Yes, inquiries may be sent to info@bakkt.com. We are focused on building a nimble, entrepreneurial team with a focus on serving our customers and delivering results. Key success factors in our culture include collaboration, problem solving, communication, integrity, and professionalism and leadership.

Thank you for your continued interest and feedback as we build out Bakkt. As we talk with those in this space, we are motivated by the opportunity to help shape the future of digital currency. We look forward to updating you on our progress in coming weeks.