This might be a little tricky considering this is institutional money, not institutional support or exchange. Basically, you have to have options so that you could make good use of your bitcoin.
Topic: Is Bakkt the Future of Bitcoin and cryptoworld? - page 2. (Read 378 times)
Bakkt is building an open, seamless global network to enable of buying, selling, storing and spending digital assets simply, safely and efficiently. So it can be said that it is the future of bitcoin and cryptoworld.
Institutional money needs to flow in freely without doubt that they are breaching regulations or taking huge risks with investor funds. Anything that can provide that type of security will help to bring more whales into crypto
Bakkt seems ready to take off with a positive acceptance from Big companies. Bakkt aim to bring institutional money to crypto world.
Will this be the gateway to bitcoin adoption and possible Bitcoin ETF approval or this will only make bitcoin more scarier for regular joe to invest and hard to adopt?
We can not be very sure about the outcome yet. But we think it might be a hope for BTC's acceptance. If this project is a success, BTC might be overwhelmed. Will this be the gateway to bitcoin adoption and possible Bitcoin ETF approval or this will only make bitcoin more scarier for regular joe to invest and hard to adopt?
Bakkt seems ready to take off with a positive acceptance from Big companies. Bakkt aim to bring institutional money to crypto world.
Will this be the gateway to bitcoin adoption and possible Bitcoin ETF approval or this will only make bitcoin more scarier for regular joe to invest and hard to adopt?
Will this be the gateway to bitcoin adoption and possible Bitcoin ETF approval or this will only make bitcoin more scarier for regular joe to invest and hard to adopt?
The problem here is the thinking that Bitcoin is only about investing.
It doesn't matter who buys bitcoins, or how much they buy, or how many exchanges there are, or how many ETFs there are. If people can't come up with a good use for Bitcoin, its value will eventually go to 0.
Bakkt seems ready to take off with a positive acceptance from Big companies. Bakkt aim to bring institutional money to crypto world.
Will this be the gateway to bitcoin adoption and possible Bitcoin ETF approval or this will only make bitcoin more scarier for regular joe to invest and hard to adopt?
Will this be the gateway to bitcoin adoption and possible Bitcoin ETF approval or this will only make bitcoin more scarier for regular joe to invest and hard to adopt?
One thing it will bring is leverage financialization, which isn't necessarily a good thing. Here's what one Wall Street veteran says could happen to the Bitcoin market once bitcoin-deliverable derivatives like Bakkt are launched:
Quote
“As cryptocurrency markets develop further, here’s what I’ll be on the lookout for: financial institutions beginning to create claims against cryptocurrencies that are not fully backed by the underlying coins (which could take the form of margin loans, coin lending / rehypothecation, coin-settled futures contracts, or ETFs that don’t 100% track the underlying coins at any given moment). None of these are happening in the market yet, though.
“So far, regulators have only allowed bitcoin derivatives in cash-settled form among major derivatives counterparties. While cash-settled derivatives can affect the price of the underlying asset, the magnitude of the impact is lower than the impact if derivatives were settled in an underlying that is “hard to borrow” or “special” (using securities lending parlance). Bitcoin is especially “hard to borrow” so a requirement to deliver the underlying bitcoins into derivatives contracts would amplify bitcoin’s price fluctuations.
“Eventually it’s likely regulators will approve bitcoin-settled derivatives among major derivatives counterparties. At that point, banks will be looking to borrow the underlying bitcoin—and that’s when the custodial arrangements made by institutional investors will start to matter. Will custodians make their custodied coins available for borrowing in “coin lending markets” as they do with securities lending today? Or will they deem the cybersecurity risks of lending coins (which entails revealing private keys) too high relative to the extra return available for coin lending? And will institutional investors even allow coin lending by their custodians? Regardless, when bitcoin-settled derivatives appear on the scene, it’s very likely that cryptocurrencies will be “hard to borrow” for quite some time because HODLers (long-term holders) own most coins and rarely use custodians.” (emphasis added)
Why does this matter? Bitcoin has algorithmically-enforced scarcity, and that’s a big part of what gives it value. If Wall Street begins to create claims to bitcoin out of thin air, unbacked by actual bitcoin, then Wall Street will succeed in offsetting that scarcity to some degree.
The same pattern happened in commodities markets, such as gold and silver. It also happened in credit derivatives, which, before the 2008 financial crisis, had grown to 10x the size of the underlying corporate bond market and had become the proverbial “tail that wagged the dog” by driving the price of the underlying corporate bonds.
If a large degree of leverage-based financialization ever happens to bitcoin, the community that secures the Bitcoin network with its processing power may move on to a different currency. Unfortunately, the news on this front is already not good, as traders confirmed that daily liquidity for synthetic versions of bitcoin is already approximately $15 billion, which is 3x bitcoin's daily spot liquidity of approximately $5 billion. Leverage-based financialization of bitcoin to date has happened mostly outside of the US—a good example of this is Hong Kong-based exchange OKEx’s confirmation today that one of its customers had major losses on a leveraged $400 million futures position, causing it to claw back $9 million from its customers to cover the exchange’s loss.
“So far, regulators have only allowed bitcoin derivatives in cash-settled form among major derivatives counterparties. While cash-settled derivatives can affect the price of the underlying asset, the magnitude of the impact is lower than the impact if derivatives were settled in an underlying that is “hard to borrow” or “special” (using securities lending parlance). Bitcoin is especially “hard to borrow” so a requirement to deliver the underlying bitcoins into derivatives contracts would amplify bitcoin’s price fluctuations.
“Eventually it’s likely regulators will approve bitcoin-settled derivatives among major derivatives counterparties. At that point, banks will be looking to borrow the underlying bitcoin—and that’s when the custodial arrangements made by institutional investors will start to matter. Will custodians make their custodied coins available for borrowing in “coin lending markets” as they do with securities lending today? Or will they deem the cybersecurity risks of lending coins (which entails revealing private keys) too high relative to the extra return available for coin lending? And will institutional investors even allow coin lending by their custodians? Regardless, when bitcoin-settled derivatives appear on the scene, it’s very likely that cryptocurrencies will be “hard to borrow” for quite some time because HODLers (long-term holders) own most coins and rarely use custodians.” (emphasis added)
Why does this matter? Bitcoin has algorithmically-enforced scarcity, and that’s a big part of what gives it value. If Wall Street begins to create claims to bitcoin out of thin air, unbacked by actual bitcoin, then Wall Street will succeed in offsetting that scarcity to some degree.
The same pattern happened in commodities markets, such as gold and silver. It also happened in credit derivatives, which, before the 2008 financial crisis, had grown to 10x the size of the underlying corporate bond market and had become the proverbial “tail that wagged the dog” by driving the price of the underlying corporate bonds.
If a large degree of leverage-based financialization ever happens to bitcoin, the community that secures the Bitcoin network with its processing power may move on to a different currency. Unfortunately, the news on this front is already not good, as traders confirmed that daily liquidity for synthetic versions of bitcoin is already approximately $15 billion, which is 3x bitcoin's daily spot liquidity of approximately $5 billion. Leverage-based financialization of bitcoin to date has happened mostly outside of the US—a good example of this is Hong Kong-based exchange OKEx’s confirmation today that one of its customers had major losses on a leveraged $400 million futures position, causing it to claw back $9 million from its customers to cover the exchange’s loss.
In other words, it's not necessarily the gateway to Bitcoin adoption. But it might be the gateway to Bitcoin financialization.
i am trying to reserve my judgement about Bakkt and generally things such as ETFs that the governments or big companies are involved in. specially when i hear the words "institutional money". i believe it has the potential to be so much more damaging to bitcoin than they can bring us anything good. and i also see that people are hyping these things up a lot which makes me even more skeptic about them.
the average Joe is either already scared of bitcoin or doesn't give a ... about it and Bakkt, ETF, SEC,... are not going to change that.
~or this will only make bitcoin more scarier for regular joe to invest and hard to adopt?
the average Joe is either already scared of bitcoin or doesn't give a ... about it and Bakkt, ETF, SEC,... are not going to change that.
Bakkt seems ready to take off with a positive acceptance from Big companies. Bakkt aim to bring institutional money to crypto world.
Will this be the gateway to bitcoin adoption and possible Bitcoin ETF approval or this will only make bitcoin more scarier for regular joe to invest and hard to adopt?
Will this be the gateway to bitcoin adoption and possible Bitcoin ETF approval or this will only make bitcoin more scarier for regular joe to invest and hard to adopt?
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