CoinMarketCap takes a deep dive into Bakkt — a NYSE-listed crypto payment company behind the recent Mastercard roll out of cryptocurrency services to banks and merchants worldwide.
The ETFs are based on BTC futures contracts that have set BTC prices that the buyers and sellers will pay at the end of the futures contracts. This is in contrast to the futures derivatives sold on cryptocurrency exchanges where the final BTC price is the market price of BTC when the contract ends.
The ETFs approval from a highly-regulated SEC could be seen as, finally, a wider adoption of cryptocurrencies, albeit a derivative product in some cases. This long-awaited event comes on the back of more companies adding crypto products or services into their offering. A major one — Mastercard's integration of cryptocurrencies into its payment network, which consists of thousands of banks and millions of merchants — drew much attention. And one company is behind Mastercard's crypto roll-out — Bakkt.
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What is Bakkt (NYSE: BKKT)?
Vision for Digital Assets
As for financial institutions, they can now help tens of thousands of businesses use cryptocurrency for transactions, rewards, payments and the delivery of goods and services. The seamless movement of digital assets into the traditional finance world will create more interest in the digital world and, in the end, result in significantly more investment, interaction and development of digital ecosystems and a closer relationship between them and traditional finance.
Bitcoin and Cryptocurrency Rewards
Ideally, more and more businesses will begin offering their customers BTC and cryptocurrency rewards for their spending preferences, activities, trading activities, etc. The consumers and businesses that receive the rewards will now be able to store them in a secure location and on a platform that is integrated into the digital marketplace and able to seamlessly work with non-digital financial systems. The key here is that the BTC and crypto rewards can be converted to fiat currency, exchanged services and goods of value off-line, and used to invest in cryptocurrency and BTC derivatives.
For example, Bakkt rewarded its platform subscribers with NFTs. The NFTs can be stored in the Bakkt ecosystem and used for a wide variety of things. The best part is that some of the people who received NFTs had to learn about them and then how to trade them. In essence, they were inducted into the digital world, NFTs in particular, by receiving free NFTs and then learned how to navigate Bakkt’s digital ecosystem while trying to make the most of their “free” NFT. With more reward programs like this and them becoming common, the digital world will flourish alongside traditional finance instead of it being a winner takes all game.
Who Are the Founders and Team Behind Bakkt?
The six founding members of Bakkt are Kelly Loeffler, Adam White, Mike Blandina, Chris Petersen, Nicholas Cabrera and Gavin Michael. Information about them and their roles at Bakkt is listed below.
The founder of Bakkt is Kelly Loeffler, the wife of ICE CEO Jefferey Sprecher. She was the first CEO and employee of the company after it was spun off from ICE. She stayed with Bakket from 2018 to 2019 when she resigned as CEO to work in the U.S. Senate to complete Republican senator Johnny Isakson’s term when he retired from the Senate.
Adam White was the second employee hired to work at Bakkt as its chief operations officer. Before Bakkt, White was one of the founding members of Coinbase. In 2019, Blandina became CEO after Loeffler resigned as CEO.
Mike Blandina was the third person hired to work at Bakkt. He filled the chief product officer position. In 2019, he became president of Bakkt, and in 2020 he left Bakkt for JP Morgan.
Chris Petersen was the fourth person to join Bakkt. He was hired to help launch Bakkt’s mobile application-based wallet. Petersen was chosen because at Google, his previous company, he worked as the payments product strategist.
Gavin Michael became CEO of Bakkt after Blandina resigned from the position in 2019. Before working at Bakkt, Michael was the head of technology for Citi’s Global Consumer Bank.
There is also a board of directors that helps to steer the company in the direction and to fulfill its vision. The five board members are Kelly Loeffler, Jeff Sprecher (ICE CEO), Sean Collins (managing partner at Goldfinch Partners), Tom Noonan (member of ICE board of directors and chairman of the Bakkt board).
Bakkt has had founders with experience in a variety of areas and lots of industry knowledge and connections. Their work on Bakkt and networks were crucial to helping Bakkt establish itself, form partnerships, and build up its ecosystem.
What Makes Bakkt Unique?
Bakkt separates itself from rival firms by creating a digital ecosystem that bridges the digital and non-digital world. It has created an infrastructure that is consistent and regulated. Moreover, it has transparent and efficient price models. Lastly, it provides institutional-grade pre and post-trade infrastructure.
Moreover, with the SEC approval of BTC futures ETF, more people will experiment with BTC under a relatively less risky and more regulated context. This may prompt them to be more likely to get involved with directly investing in BTC derivatives on cryptocurrency exchanges. Finally, the crypto market is hoping that investors’ increasing interest and familiarity with crypto markets will translate into them directly investing more fiat currency into cryptocurrency.
Bakkt App: Crypto Services
Bakkt allows its platform users to convert their digital assets into other crypto investments, fiat currency, non-digital payments, and trade them for offline goods and services. The crypto services program also rewards its users with NFTs, cryptocurrency, and other crypto-related goods and services. The idea is to keep people in the crypto world as much as possible and to motivate them to explore their options on the Bakkt platform. As Bakt enters more partnerships, its platform users will have even more options available to them and seamlessly link them to the traditional finance world without them ever leaving the digital ecosystem.
Partnership with Mastercard
Mastercard has partnered with other crypto-related service providers to enhance the financial service options available to its customers. Its partnership with Bakkt has benefitted both companies by expanding the financial services that they can offer their customers. For example, Bakkt’s partnership with Mastercard increases the accessibility of cryptocurrency and crypto rewards to more than 20,000 businesses around the world.
“These include the ability for consumers to buy, sell and hold digital assets through custodial wallets powered by the Bakkt platform and streamlined issuance of branded crypto debit and credit cards. Mastercard will also integrate crypto into its loyalty solutions.”
Some of the benefits include the Bakkt Credit and Debit Cards which can be used anywhere that accepts Google Pay or Apple Pay. Platform users can even send their friends and family eGift cards and cryptocurrency. The best part, platform users can use their cryptocurrency to pay for coffee at Starbucks, offline bills, and even make crypto investments. The best part, the app shows you your up-to-date balances and lets you use cryptocurrency, credit, and fiat currency to settle bills and make payments.
Partnership with Google
Bakkt has partnered with Google to have access to Google Cloud, Google analytics and Google financial services. Google is a global behemoth with an existing infrastructure and data collection APIs that are unimaginable to most people. This global network, extensive information gathering system, and all-encompassing infrastructure mean that Bakkt has less work to do to expand its reach and influence in different markets and industries.
Google benefits from Bakkt’s easy access to cryptocurrency and crypto investments. This enables Google to expand its presence into the digital world and to offer digital goods and services at competitive prices to its platform users, partners, and partners’ customers. Furthermore, Google Cloud has so much storage space and is so flexible and easy to operate in that it’s a literal tech playground for Bakkt’s research and development team.
Future Outlook and Roadmap for Bakkt
Bakkt has had numerous successes since it was founded, but it has refused to rest on its accomplishments. Currently, Bakkt focused on the following:
Building a broader partner ecosystem
Expanding the access and utility of its digital assets
Gaining momentum in a space that continues to grow exponentially
Expanding its fintech services
To accomplish all those things, it must continue to grow and develop its services and ecosystem so that it can offer its future partners things that they cannot easily find anywhere else. Also, as the sum should be greater than the whole, Bakkt must continue to create offerings that don't already exist and that are relevant and of value to its three categories of users: consumers, businesses and institutions.