The global powerhouse behind digital assets platform Bakkt has a bold plan to grow the Bitcoin market, and if history is anything to go by, it can pull it off.
Intercontinental Exchange (ICE), which is more famous for running the New York Stock Exchange, believes Bitcoin has the potential to boom like oil markets did in the early 2000s.
The key? Regulation.
Kelly Loeffler, CEO of Bakkt, says that in 2002, Intercontinental Exchange listed only a handful of oil contracts, whereas today, it offers over 500 of them.
“The oil market went from inconsistent regulation … to a regulated futures market that was transparent and liquid — and many times larger and more useful for commercial hedgers and traders,” Ms Loeffler said in a blog post.
“The market grew alongside the application of regulation. That’s why we believe the sooner a regulatory approach to digital assets is determined, the better positioned we are to support healthy markets and innovation within a dynamic global marketplace.”
Ms Loeffler says she recently attended a FinTech conference, where regulators were part of a “helpful dialogue on digital assets.”
“Many of us share the view that a new asset class is forming and a framework for operating within these markets is welcome,” she said.
“The potential for product development is strong, as is the need for regulatory certainty.”
The comments will be welcome news to cryptocurrency investors, who are enduring one of the largest crashes in the history of the asset class and have just been told by Bakkt that its platform launch has been delayed.
At this stage, Bakkt will build its futures contract on Bitcoin, and at this stage, not other digital currencies.
“Bitcoin today accounts for over half of total crypto market capitalization,” Ms Loeffler said.
“It has been deemed to be a commodity, and its derivatives are regulated in the US by the Commodity Futures Trading Commission (CFTC).”
“As the world’s most liquid and widely distributed cryptocurrency, and where we’ve seen the most customer demand, Bitcoin’s profile creates a liquid product on which to build a futures contract.
“We’ll consider additional contracts as the landscape evolves and as we receive additional customer feedback about what they want and need.”
Bakkt plans to launch on January 24, 2019, subject to regulatory approval. M