Bakkt has been the talk of the crypto water cooler for nearly six months now. Conversations about it being a “bear market buster” abound, and it just may be. But it has to be approved by the CFTC before that can happen. And as of today, the lights are a bit dim in CFTC offices in Washington, DC – per the US government shutdown.
But that reality isn’t slowing down the inner workings of Bakkt, its staff, and the teams built around the global commodities exchanges controlled by Intercontinental Exchange. The ‘buzzing’ that can be heard amongst those connected to the Bakkt launch is loud and growing. Work is being done and preparations are in full gear.
The clear expectation is that CFTC approval will follow shortly after the reopening of operations at the CFTC following the end of the shutdown. And the Bitcoin initiative known as Bakkt, partnered with Microsoft and Starbucks, will launch like a rocket.
Take a step back and consider the huge venture capital names committed to Bakkt at the moment. A few names connected to their first round of funding read like an All-Star team of sorts: Fortress, Galaxy Digital, Horizon Ventures, M12 (Microsoft’s own venture fund), and a host of others.
The investment is not necessarily a play on Bakkt trading volumes or the price of Bitcoin, but rather on adoption and daily use that Bakkt plans on pursuing. Here is a portion of that case stated by Maria Smith, Vice President, Partnerships and Payments for Starbucks:
“As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into US dollars for use at Starbucks. As a leader in Mobile Pay to our more than 15 million Starbucks Rewards members, Starbucks is committed to innovation for expanding payment options for our customers.”
In other words, the play for flagship institutional investors is not the volatility associated with Bitcoin, but rather the real world application of it when you walk into Starbucks and order a Grande Cordusio. With a swipe of a finger and a push of a button, Bitcoin is deployed and used for purchase at one of the largest retail chains in the world.
So what is happening today as Bakkt prepares to launch an entirely new asset into the commodities space?
The Bakkt team is working furiously as they prepare for a marketing and execution blitz that they believe will produce tremendous volumes and attract all manner of institutional clients very, very quickly.
One source familiar with Bakkt’s preparations had this to say about what they expect once CFTC approval occurs:
“Take a close look at the increased public dialogue that Bakkt is having with the crypto and financial community. Whether it is a Medium post by Kelly (Kelly Loeffler, CEO of Bakkt) or social media posts meant to continue to build a Bakkt narrative, the PR and marketing ramp up is preparing for launch and all that comes with it.”
“Once launch occurs you can expect Bakkt leadership to be all over the airwaves and in front of TV cameras preaching the Bakkt gospel. And that can be characterized as the safety, custody, and daily use case ecosystem that Bakkt provides to investors. Kelly is uniquely qualified to tell that story and will be a media darling.”
More color on where Bakkt is headed once approval is finalized from sources we spoke with familiar with the firm. The Starbucks initiative is a 2020 project and will be carefully talked about in conjunction with reps at the behemoth coffee company. ‘Message discipline’ will be important with respect to Starbucks so as not to fall into the trap of overpromising and underdelivering.
At launch much more will be made of Bakkt’s familial connection to ICE and their technology partnership with Microsoft. Those will be highlighted early and often as they are trusted names amongst institutional investors and global investment banks.
Further, you can expect Bakkt to be more an more visible at larger financial and technology conferences of note. Also expect the Bakkt message to be spread in the largest of media organizations like the Wall Street Journal, New York Times, CNBC, Bloomberg and the like. Bakkt wants to build a lock-tight institutional seriousness around digital assets and the safety they plan to provide to investors. They believe keeping messaging to legacy outlets will send that message.
Messaging, optics, partnerships, adoption, safety, real-world use cases, ICE, Microsoft, Starbucks, and ‘more digital asset products to come’. Maybe Bakkt is the bear market slayer we all hope it to be?