Foreword: Bakkt is jointly developed by the New York Stock Exchange's parent company Intercontinental Exchange, Starbucks, Microsoft and Boston Consulting Group to provide institutional-level custody of cryptocurrency, real-time delivery of futures transactions, merchant payments, compliance and other services. It was established in August 2018 and launched a user test of BTC physical delivery futures contracts on July 22, 2019. Bitcoin futures for daily settlement and bitcoin futures contracts with monthly settlement are currently available. So what does Bakkt bring? Why is it launched? The author, Mark Helfman, believes that Bakkt is the best hope for Wall Street to maintain its dominant position. This article was translated by "SIEN" from Blue Fox.
How does Bakkt save Wall Street?
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Bakkt is interesting because it allows financial professionals to buy, sell, and trade cryptocurrencies, using an enterprise-level trading infrastructure tailored to cryptocurrency traders. It plans to use Coinbase as a prototype to provide the complex tools that derivatives, investment services, and large investors need to manage their money.
Most importantly, Bakkt will bear all regulatory and operational risks of purchasing and selling cryptocurrencies, including custody, security, insurance, and liquidation of all transactions.
Basically, Bakkt gives institutions and large investors “safe” trading with clear rules, regulations and expectations. At some point, it also provides merchant solutions such as credit card and payment processing. Bakkt built a complete market from the start, with one goal: to control the cryptocurrency market, just as its sister company, the NYSE, dominates the stock market.
If you already use cryptocurrency, you will realize that Bakkt is completely unnecessary and redundant. When you buy stocks, clear transactions, buy CDOs, or trade derivatives and other financial products, you need Wall Street. You need a broker, you need a dealer, you need an investment company. You need someone who is in it.
Download a Bitcoin Wallet? Anyone can do it. Register for Coinbase or Gemini? simple. If you can learn how to use the checkbook, you can learn to use Bitcoin wallets. If you can learn to order food online, you can also learn how to register for a cryptocurrency exchange. You don't need Wall Street.
This is the focus of cryptocurrencies: anyone can use them.
Is Wall Street important? Yes, of course it is important. It plays a pivotal role in the world economy. It collects a small amount of money from many people and forms a large fund. Governments, businesses, farmers, and banks use these funds to grow, make money, and create jobs. Through the operation of Wall Street, investors can get a small return.
In return, Wall Street gets a little profit and ensures that everyone gets fair treatment. These include clearing houses, clearing houses, recorders, compliance professionals, traders, brokers, and many others.
This is actually the way to start Wall Street. In 1792, the US stock market was very chaotic and full of fraud. A group of traders signed an agreement in a house on Wall Street, using only fixed, transparent fees for transactions between them. They set up small businesses around Wall Street to help them with settlement, clearing, certification, notarization, and all legal and administrative activities that are in order and function. (Blue Fox Note: The article 1792 is an important year in the history of US securities trading. In 1792, 24 brokers in New York jointly organized the "New York Stock Exchange" on the 11th Wall Street, also known as the "New York Stock Exchange." "Predecessor."
Over time, it has grown into the financial center of the United States. For financial institutions, it is a huge profit center.
Cryptographic currency makes its profit lost
The cryptocurrency makes Wall Street's services obsolete.
Once the asset is tokenized and recorded on the blockchain, you don't need a clearing house. Once a developer has created a user-friendly smart contract and decentralized exchange, you don't need a broker dealer. Once distributed financial applications are popular, you don't need a trading company.
You will no longer need Wall Street to provide legal and administrative services such as clearing, processing, certification, brokerage of financial transactions, etc.
You may not need Wall Street at all.
As a whole of finance, it will be transferred to a network of professionals like AirBNB and small companies connected through technology. You may have seen the trend of FinTech, which is moving from a cumbersome, bureaucratic company to more flexible competitors such as Personal Capital, SoFi, Circle and other emerging companies (some of which are subsidiaries of Wall Street firms).
Cryptographic currencies will accelerate this trend.
Bakkt is the best hope for Wall Street to keep profits
Bakkt won't change the trend, but it can lead. It can incubate technology and make smart contracts more useful. It fosters networks that connect entrepreneurs and cryptocurrency companies. It can develop infrastructure to support large-scale crowd adoption of cryptocurrencies. It can use its image and credibility to build public trust in the legitimacy of cryptocurrencies.
Think about the famous words of Mahatma Gandhi:
"First they ignore you, then they laugh at you, then they hit you, and finally you win."
Bakkt is doing the reverse behavior that Gandhi said. It does not ignore, ridicule or attack cryptocurrencies, but tries to win. It is led by some of the world's most connected and mature players. It is supported by some of the largest cryptocurrency advocates on the planet. It has a bold vision and a strong partnership that draws the attention of the entire cryptocurrency market. It has drawn worldwide attention. Will it succeed?
This is Wall Street, it has to be successful. Otherwise, Wall Street will disappear.
Risk Warning: All articles in Blue Fox Notes do not constitute investment recommendations . Investment is risky . Investment should consider individual risk tolerance . It is recommended to conduct in-depth inspections of the project and carefully make your own investment decisions.