According to the latest news from the official announcement, Bakkt, an encrypted derivatives platform under the Intercontinental Exchange, announced on March 16 that it has completed the B round of financing, raising a total of 300 million US dollars. Intercontinental Exchange, the former Microsoft venture capital department M12, PayU, Boston Advisory Group, Goldfinch Partners, CMT Digital and Pantera Capital all participated in the investment. Bakkt’s new CEO, Mike Blandina, mentioned in a statement that the newly raised funds will be used to develop core services for digital assets, such as the cryptocurrency payment wallet app that the company expects to launch this summer.

In the current situation of intensified financial market turbulence and low market sentiment, Bakkt's financing amount is still amazing, which has attracted the attention of many investors. The second financing of US$300 million not only made Bakkt’s total valuation exceed one billion US dollars, but also made it the third largest enterprise in the encryption field after Coinbase and Bitmain in terms of financing scale.

Another piece of good news is that Starbucks recently announced that it has added Bakkt's payment tool "Bakkt Cash" as a payment option in the app, which is currently being tested by some customers in the United States. US Starbucks users may soon have the option to order coffee with cryptocurrency.

Previously, Bakkt's Bitcoin futures contract has been attracting our attention. Bakkt has always been likened to a "bull market engine" because of its Bitcoin business, but it turns out that the "engine" has not taken effect at present. However, in the eyes of many investment analysts, Bakkt is still optimistic, and its long-term influence is huge. And beyond its crypto derivatives, Bakkt seems to have bigger ambitions. What will happen this time?

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The "regular army" entering the bitcoin trading market

Bakkt was established in August 2018. It is not only an encrypted derivatives trading platform under the Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, but also an online platform jointly launched by well-known giants such as Microsoft, Starbucks, and Boston Consulting Group. Mainly used to buy, sell, store and spend cryptocurrencies.

The main sponsor of Bakkt, Intercontinental Exchange Group (ICE), was established in 2000. It is one of the three largest exchange groups in the United States. It owns and operates 23 regulated exchanges and markets, and trades more than half of the world's crude oil and refined oil futures. , has an absolute right to speak in the financial field. ICE's resources and influence, as well as technical accumulation and experience have become Bakkt's strong background and great advantages that can be used.

It can be said that Bakkt is not only a "nobility" born with a golden spoon in his mouth, but also has top-level executive configuration, and is also compliant and supervised, which has doubled the favorability of investors. And what makes Bakkt most famous in the currency circle is not only its origin, but the Bitcoin futures contract.

In June 2019, Bakkt was approved by the U.S. Commodity Futures Trading Commission (CFTC). In August, the New York State Department of Financial Services (NYSDFS) granted it a license to establish a trust company as its custody tool. Bakkt has been justified since then. After obtaining regulatory approval, Bakkt began to officially enter the Bitcoin futures contract market. On September 23, it launched the Bitcoin futures contract that investors have been "looking forward to", and it is also the first futures contract in the encryption market to provide physical delivery. . And this provides institutional traders with the greatest security, which is very attractive to institutional investors.

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Bakkt open interest and volume

Although Bakkt has not brought the so-called bull market to the market at present, in the eyes of analysts, its long-term influence is still worthy of attention.

“Bakkt has the ability to improve institutional trust in cryptocurrencies,” former JPMorgan executive Tom Lee tweeted four days after Bakkt opened trading. Well-known cryptocurrency commentator and quantitative analyst Plan B believes that Bakkt provides liquidity to the Bitcoin market because it provides institutional investors with a safe exposure. Sasha Fleyshman, a trader at encryption investment management company Arca, believes that cash-settled Bitcoin futures may undermine the principle of Bitcoin's "hard cap supply" because even if there are not 21 million Bitcoins on the chain, cash-settled Bitcoins can still be used. Bitcoin futures are oversold, and Bakkt, a physically-delivered futures contract, effectively restores the scarcity of Bitcoin, which can reduce the possibility of market manipulation and excessive volatility to a certain extent.

So why haven't we seen obvious benefits yet? Scott Melker, a well-known Twitter analyst, said that in the final analysis, Bakkt is just a tool, and institutions need to have enough interest to use it. It remains to be seen whether there will be long-term demand for such financial instruments in the current market.

Institutions have never been known for moving fast, breaking old and building new, and the due diligence and entry of these businesses takes considerable time. In other words, even if an institution wants to enter the Bitcoin market, it needs to wait and see, which is a relatively long-term process. It is more reasonable to see whether Bakkt is successful or not in a few years, rather than judging only a few months after it goes online.

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Occupy the cryptocurrency payment market ambition

Behind the hype surrounding crypto derivatives, Bakkt’s ultimate goal is to enable an efficient, regulated market for digital currencies, and in turn push cryptocurrencies to change the way we pay for everything from drinks to airline tickets. The CEO of Bakkt said in an interview with Fortune magazine last year, "ICE's goal is to transform Bitcoin into a widely used and reliable global currency." Through physical delivery of Bitcoin futures, Bitcoin has produced physical After the transaction value, Bakkt will quickly open up the field of cryptocurrency payment.

In fact, Bakkt's bitcoin payment ambitions have been "lurking" for a long time. As early as two years ago, when Bakkt was established, it was already "laying the foundation" and "paving the road."

Back in 2018, when the Intercontinental Exchange (ICE) announced the establishment of Bakkt, it specifically pointed to a partnership with Starbucks. In 2019, Bakkt's former chief product officer (current CEO) Mike Blandina said that the Bakkt app will finally go live in 2020, when Starbucks will become the first launch partner.

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"Bakkt Cash" product prototype

In addition to solving payment scenarios, Bakkt is also preparing customer service and solutions. On February 5 this year, Bakkt announced that it has acquired Bridge2 Solutions, a point exchange solution provider. Bakkt will leverage Bridge2's existing relationships with banks and merchants, as well as its "Loyalty Payments Solution," to launch a cryptocurrency payments app that will provide users with a wallet to store a range of digital assets, including cryptocurrencies and loyalty rewards , which largely helps to enhance Bakkt's customer loyalty and consumer competitiveness.

According to the current CEO of Bakkt, Bakkt now has 350 employees and provides loyalty exchange programs for 7 of the 10 top financial institutions.

In addition, ICE had planned to acquire the e-commerce giant eBay. There is no latest news yet, and it may still be in contact.

At present, it seems that Bakkt is constantly targeting and expanding large customer groups such as retail, and its ambition to occupy the cryptocurrency payment market is undoubtedly revealed.

In addition to the above-mentioned Bakkt layout actions, PayU, one of its investors, can also provide it with a complete payment solution, and Mike Blandina, who was previously in charge of Google Wallet, as its current CEO, is very important to its payment wallet business. It is a big plus. Therefore, Bakkt not only has the ambition to occupy the cryptocurrency payment market, but may also have such strength.

If this day comes, Bakkt's mobile payment project will become a bridge between the cryptocurrency market and the traditional consumer market, which will not only broaden Bakkt's business scope, but also help increase the utilization rate of Bitcoin. On the other hand, the expected vision of "Bitcoin is widely accepted and used" will be realized, and it is hoped that more traditional investors who hold large amounts of funds will gradually enter the cryptocurrency market. In this way, cryptocurrency payment applications will also become one of the breakthroughs to increase the practical value of Bitcoin.