The real role of Bakkt: or the traditional fund control tool for bitcoin share

First, the pain point of the cryptocurrency market: infrastructure is difficult to meet the flow of large amounts of money

Before we begin to discuss the specific impact of the Bakkt exchange, let's take a look at the purpose of this platform.

As we all know, the biggest feature of Bakkt is the origin of the famous door. The lineup of the employer is strong. It is said to be the representative of the traditional elite. There is no problem at all. In view of the fact that the earliest time of disclosure was special—that is, in August 2018, when the exchange was smouldering, it was once considered by the industry public opinion to be a follow-up action by the elite. However, comprehensive In terms of factors, the intention of Bakkt and the luxury group behind it is actually far more than that.

In the author's previous article, one thing was mentioned: an important reason why the ordinary class can achieve class crossing through cryptocurrency is that they broke the value distribution mode of the traditional legal currency "the stronger the stronger" and obtained The vast majority of cryptographic assets distributed by the blockchain network make it easy to achieve hierarchical traversal. For the elite, they need to regain their dominance in the encrypted world, but the problem is that it is not so easy to get the cryptocurrency market. It is not difficult to find out that the cryptocurrency after this time point is relatively well controlled by the elites. It is better to control some public and private funds through their own network resources. The channels are OK. In fact, they are already doing this. Now the share of the value items in the primary market is basically out of the ordinary. If you want to start, you can only go to the secondary market.

However, before the cryptocurrency before this point of time, the elite has not yet achieved control over the main share, such as the many POW projects such as Wright and the dog. In this way, if these mainstream assets achieve value-added, the traditional elites will not be able to enjoy the dividends. In the current market situation, the development of old grassroots temperament projects is actually more sustainable than the new projects purchased by the elites. Sex. The performance of the market in the past year is the best example: those old currencies with higher consensus are calculated as grassroots, and the possibility of steady growth in the future is also great. As for the newly added cryptocurrency, even if the team background is luxurious, the platform Celebrities are hardcore, market performance is often unsatisfactory, and even the price will return to zero, so that the elite who broke the head to grab the share at that time regretted it.

Therefore, for those elites who intend to save their existing social status by investing in cryptocurrency, their focus on this front is not only how to grab the primary market share of new projects, but how to The dominant position in the old currency sector. According to some industry friends, can this be bought and bought in the market? Anyway, the total market value of the encryption market is now less than $300 billion. Several large funds are enough to put the majority of this market in the pocket.

But the problem is that things are not so simple. Many friends' mistakes in judging this problem are: because their own funds are relatively small, it is easy to look at the process of elite entry with a static view, but ignore it. Another thing: due to the characteristics of digital asset trading, with the funds of the elite, when the cryptocurrency market is added, the cost of receiving goods will be raised at an extremely fast rate.

Given that many of my friends may not know what the amount of money at the Nasdaq market level is, here is a simple example. There are about 3,000 private equity fund management agencies in the United States in 2017, and the total size of management funds. It reached $12.5 trillion, which is about $4.2 billion per home. It is worth about 420,000 bitcoins based on market prices. At present, the top three of the Bitcoin Rich List – that is, the bitcoin in the cold wallet of the three major exchanges of the currency security, the fire coin and the Bittrex add up, which is almost the same amount. This kind of money is in the cryptocurrency market. Hey, there is no need to say anything about the price, and this is just one of the 3,000 funds. In fact, even if the fund only took out 1% of the funds – that is, 40 million US dollars into the bitcoin market, in a short period of time is enough to confuse the cryptocurrency market.

From the above statistics, we can hardly find that the traditional infrastructure of the digital money market is really unable to support the traditional funds in the digital money market. This industry is currently unable to support this industry. The depth of the transaction is not shared, and it also supports unlimited long and short, so that once the bulk of the funds enters the market, it will quickly increase the price of the fundraising, if the market is aware that the elite has a certain position. Just the need, then the cost of receiving goods is likely to be unimaginable, and from another point of view, if the elites one day have the need to cash out, they may get low income. The degree of imagination, as a result, the actual rate of return of the massive funds of the elite in the encryption market is much lower than the theoretically rich paper, and it is not necessarily possible to outperform the value stocks in the traditional financial market. This is actually an important reason why mainstream funds have been slow to enter.

Having said that, the main appeal of the elite in the current cryptocurrency field is already obvious: it is to absorb most of the mainstream currency at the lowest possible cost; at the same time, it can be expected at a higher price when necessary. Gloves are now available. But the problem is that the current infrastructure of the currency circle is far from meeting their requirements. As a result, they must build their own tools to achieve the above intentions. The primary form of this tool is the highly regarded Bakkt exchange in the industry. .

Second, the role of Bakkt: or into the traditional fund continuous absorption channel

How did Bakkt become a tool for the elite to use for low-cost absorption? Specifically, it can be summed up in one sentence: "One tool, two ways." Among them, "a tool" refers to the "real delivery" frequently discussed in the industry some time ago, as for "two ways", which are respectively It is “collecting traffic” and “low-cost sweeping”.

Let's look at the "convergence traffic". Needless to say, one of the important implications of real delivery for the elite is to compete for as much bitcoin as possible from the market. Otherwise, it is difficult for you to explain why the Bakkt transaction and the many gold owners behind it have a strong influence on Congress and the government, but still choose to use Bitcoin, which may face stronger supervision, as the settlement unit. Under such circumstances, if everything goes well, we will probably see Bakkt's wallet address in the top of the Bitcoin Rich List in the future. The balance will be higher than the exchanges we see now, BHO and so on. The sum of bitcoins added up is more.

On the other hand, for the international elite, the encryption assets of their own are more reliable on the NASDAQ parent exchange, or they are more reliable in a centralized private company that faces regulatory risks at a few moments. . Even if there is a major loss or even bankruptcy, the former will have a perfect bottoming and clearing mechanism, and unlike Bitfinex, investors will always be afraid of it, and there will be no situation in which people and money are lost when Mt.Gox goes out of business. Come, if Bakkt goes live, they will probably take their digital assets out of the cold wallet and the original exchange and switch to Bakkt's asset library. After all, for them, whether they are keeping their private keys or trusting the small business background, they can only be regarded as a stopgap measure, and the asset custody fees paid to Bakkt are in line with the huge risk cost of the above assets lost. Compared to the elite, that is quite worth mentioning.

Under the advancement of these two factors, when the time is ripe, Bakkt with sufficient capital reserves is likely to extend the existing trading varieties from futures to spot, and even extend the trading target from Bitcoin to other. The digital assets, in turn, allow institutional-level funds to be safely funded with sufficient trading depth.

After reading the "convergence traffic", look at the "low-cost sweeping". The “cheap sweep” here refers to the fact that after Bakkt brings together the global elite bitcoin assets, it takes a portion of these use-only bitcoins and converts them into bitcoins that they own. As for the specific means, it is actually the two main sources of income for Bakkt: one is the handling fee, and the other is the storage fee (similar to the overnight fee in the traditional financial market). For Bakkt, the trading and storage framework is readily available: the exchange's bitcoin futures are traded on Bakkt's parent company's ICE futures US and settled on ICE Clear US. The marginal cost of consumption is extremely low, but the marginal profit generated is very high. So if we continue to see more large companies becoming Bakkt's employers in the future, don't be surprised. After all, the social elite who wants to divide the circulation and storage profits of Bitcoin is not only the 12 shareholders that the outside world sees.

From the above analysis, in fact, it is not difficult to see that Bakkt is definitely not a high-level pursuit of the elite, as we imagined at the beginning of the article, but a highly targeted entry, and its purpose is to At the same time, I cut into the consumption links and circulation links of the cryptocurrency that the author mentioned in the first series of columns, which is currently dominated by grassroots. If you can’t figure this out, people will easily reproduce the kind at the end of 2017. In the state, the front foot is still cheering for the COBE on-line bitcoin futures, and the hind legs are stunned in the pouring waterfall, but they can't always connect the two things together.

Bakkt is like this. Although many industry celebrities have predicted that “Bakkt can open a big bull market for several years”, I can tell you that this will not happen, it is not what Bakkt and the elite behind it want to see. Scene. As for the reason, as the author has previously introduced to you: If the market is launched before the layout is completed, then you cannot get enough industry dividends from it. In other words, the sights that the elites hope for may be the opposite of ordinary people who are "looking for cattle" all day long, as well as many "big money".

The author gives the readers an example. Everyone should be able to understand the truth: In an interview in the first half of the year, the big gold lord behind Bakkt and Nasdaq, the CEO of the Intercontinental Exchange (ICE), once said: The cryptocurrency (compared to the previous two years) prices have come at a time when the exchange operator can buy assets for its cryptocurrency platform subsidiary Bakkt at a discounted price." This statement was shaped by the frustration of the industry at the time. sharp contrast. The executive even said very explicit: The so-called winter of the cryptocurrency industry is really "very helpful", of course, here he is referring to the "elite" of the elite, not the ordinary.

Therefore, we must understand that the elite does not want the cryptocurrency market to rise rapidly at this stage, but hopes to start to rise after the completion of their own layout. As for when they will complete the layout, it is not known. In fact, if we are going to do it afterwards, the Bitcoin futures event that was generally considered by the industry to be a big profit at the end of 2017 is actually a short-selling action by the elite. The purpose is to suppress the price of Bitcoin. Create opportunities for your admission. Because in the eyes of the Wall Street elite, "the cryptocurrency will continue to exist… Bitcoin seems to have lived in the swamp, but eventually survived." (ICE executive) Since the rise in this asset (that is, the return) is Ok, then there is only one thing left to do next – that is, the cost of receiving the goods.

So, in order to get the price of Bitcoin at a suitable point, they launched COBE at the time, and the result was a long big bear market, and this time, in order to continue to inhale bitcoin at a low enough level, these social elites Another important infrastructure, Bakkt, has been introduced. After all, although the $180 million in financing is enough to make the currency linger, if it can be paid at such a price, the elite can control the market value of about 200 billion US dollars. The currency, as well as the mainstream altcoin with a market value of nearly $50 billion, is still quite cost-effective.