Intercontinental Exchange, an American company that owns exchanges for financial and commodity markets such as the New York Stock Exchange, announced that its cryptocurrency exchange Bakkt is set to launch in November. The exchange is designed as an easy entry point for institutional investors to delve into the crypto market.
According to Bakkt’s Twitter account the launch will include the feature physically-delivered Bitcoin futures contract:
“Our first contracts will be physically delivered Bitcoin futures contracts versus fiat currencies, including USD, GBP and EUR. For example, buying one USD/BTC futures contract will result in daily delivery of one Bitcoin into the customer’s account.”
While Bakkt purports to give institutional investors ease of mind when it comes to cryptocurrency, it seems that according to Bloomberg, hedge funds have already surpassed wealthy individuals as the major buyers of cryptocurrency for sales valued over $100,000.
According to Bobby Cho, global head of trading at Cumberland, the Chicago-based cryptocurrency trading unit of DRW Holdings LLC:
“One of the biggest criticisms of crypto by institutional investors has been the volatility. Over the last four to six months, the market has been trading in a very tight range, and that seems to be corresponding with traditional financial institutions becoming more comfortable diving into the space. A third of DRW’s transactions are happening during Asia hours.”
Cho went on to explain that the over-the-counter (OTC) markets are in a slump being paralleled by the crypto market, it does seem that many institutional investors are taking advantage of the cryptomarkets stabilizing prices, as the volatile price swings are settling down.
Bakkt is a project derived from the joint venture of Microsoft, Boston Consulting Group and Starbucks, with the aim to create a leading cryptocurrency exchange, as well as allowing the exploration of Bitcoins into a variety of financial instruments.
It does seem like Bakkt’s announcement will help to draw in the some of the hesitant institutional investors into the cryptocurrency community, and which will more than likely increase the price of BTC with the new money being injected.