Bitcoin enthusiasts are off to a promising start for 2019 as Bakkt announces the completion of a $182.5 million funding round from a host of influential venture capital funds.
‘Bakkt’ by the Biggest
Bakkt was launched by the Intercontinental Exchange (ICE), the parent firm of the New York Stock Exchange, along with several other influential derivatives and futures bourses to satisfy the institutional interest in cryptocurrencies. Bakkt aims to become a trusted gateway for trading bitcoin-focused financial products. Apart from price speculation, ICE is also looking to facilitate the use of bitcoin in everyday payments and cross-border money transfers.
Initially expected to launch in November 2018, Bakkt’s operations were postponed to start in December 2018, and then again to “early 2019” on the count of necessary permissions from regulators such as the Commodities and Futures Trading Commission (CFTC).
Unlike most crypto-firms, Bakkt did not offer a tokens sale to raise funds. Instead, it followed the traditional venture capital approach with investors bidding their positions in exchange for equity in the business. Some notable stakeholders include Microsoft’s M12 ventures, PayU, CMT Digital, Pantera Capital, and the Boston Consulting Group. The round was completed Dec. 31st, with a total of $182.5 million raised. Few details are available on how equity was divided between the different investors.
Bakkt’s “killer app” is bitcoin contracts delivered within one day. Moreover, Bakkt offers a ‘physical’ warehousing option for cold storage, rather than having private keys stored in an exchange cloud server, which tend to have non-transparent security standards.
An Active Year for Crypto
The project is led by Kelly Loeffler, the former head of communications and marketing at ICE. Under her purview, Bakkt has finalized deals with Microsoft for their cloud services, and Starbucks to enable real-time conversion of bitcoin—allowing for in-store coffee purchases.
In a blog post, Loeffler noted 2018 was the “most active year for crypto,” unlike what most amateur investors might think. She added:
“This [active year] was evidenced by rising investment in distributed ledger technology and digital assets, as well as by blockchain network metrics such as daily bitcoin transaction value and active addresses. Yet, these milestones tend to be overshadowed by the more narrow focus on bitcoin’s price, which has been seen by some, as a proxy for the potential of the technology.”
Despite plummeting cryptocurrency prices, the shut down of institutionally-backed crypto-startups, and widespread layoffs in the space, there is optimism for 2019.
TechCrunch reported that a total of $2.2 billion was invested in U.S.-based projects in 2018, while global startups attracted over $4.6 billion—representing a four-fold increase compared to 2017. In that vein, it seems venture capital firms and prominent investors remain bullish on crypto going into Q1 of 2019.Posted In: Bitcoin, Adoption, Crypto Exchanges