Reports filtering in reveals that all is not well in the crypto world as a result of the US government shutdown.
The crypto trading platform, Bakkt, owned by Intercontinental Exchange (ICE), has been forced to defer its launch until springtime because of the shutdown. Also affected by the shutdown is SolidX Partners’ new Bitcoin Exchange Traded Fund (ETF).
The Launch of Bakkt at a Standstill
The delay currently experienced by Bakkt has to do with obtaining approval from the US Commodity Futures Trading Commission (CFTC) which the government shutdown has prevented. According to reports, the approval date for the company has been moved to April.
Kelly Loeffler, the CEO of Bakkt, wrote the following on Medium on the 31st of December: “Clearing firms and customers have continued to join us as we work toward CFTC approval. We made great progress in December, and we’ll continue to onboard customers as we await the ‘green light.’” A Bakkt spokesman refused to comment further.
The CEO and Chairman of Global Markets Exchange Group International LLP, a global financial market solutions provider based in London, Hirander Misra said, “Bakkt is an ambitious project, and as such the initial timeline offered was too optimistic.” He continued, “Launching in April if it meets the deadline will still mean it has good first-mover advantage ahead of other related initiatives which could emerge in established markets.”
The CEO of LOTS, Zeen Zhang said that the launch of Bakkt is expected to bring about crypto assets “incremental funding”, particularly from conventional investment funds.
ETF Launch Postponed
The US government shutdown will also interrupt the approval of Bitcoin ETF by the US Securities and Exchange Commission (SEC), according to reports.
Previously it was obtained that the US securities regulator would make a decision on the approval of the Bitcoin ETF on February 27, but current events will likely bring about a date extension.
An SEC spokesman said no comment would be made by the US regulator on the Bitcoin ETF because of the US government shutdown.
Mr. Misra is of the opinion that the struggle to get regulatory approval by Bitcoin ETFs will not stop. He said, “Not only do cryptocurrency markets and associated futures contracts need to be more liquid, but additionally, institutional investors want ETFs which can give them broader exposure and diversity.” He continued, “In this regard, a multi-basket cryptocurrency ETF on key liquid cryptocurrencies could prove more useful.”
The Benefit of Bakkt
The launch of Bakkt platform will make the crypto markets to receive an increased presence of institutional investors. Futures trading makes available an exchange-based portal which investors can use to place bets on the performance of crypto prices. Even though the trading of Bitcoin futures is already a possibility, Bakkt will introduce something new by becoming the first futures-offering trading platform that provides cryptocurrency payouts.
A lot of people are of the opinion that more Bitcoin futures is a good thing. Misra said that the more conventional investment funds accept digital assets, the more investments flow into the crypto economy. He said that product development and infrastructure might be the main focus this year with the year 2020 witnessing an accelerated investor activity and a “more exponential” growth marking the year 2021. Mr. Misra said, “This bodes well for a multitude of digital assets, with deliverable futures contracts, tokenized funds including ETCs, ETFs, and security token offerings especially benefiting.”