How Bakkt works
What is Bakkt
Bakkt is a subsidiary of the Intercontinental Exchange (ICE), which is the parent company of the New York Stock Exchange (NYSE). Bakkt provides a platform for trading, storing, and spending digital assets, specifically cryptocurrencies such as Bitcoin, Ethereum, and others. The company aims to bring institutional-grade infrastructure to the cryptocurrency space, enabling institutions, merchants, and consumers to participate in the digital asset economy. Bakkt’s offerings include a regulated exchange, custody services, and a consumer app for spending digital assets. Its goal is to create a seamless, trusted ecosystem for digital assets, which will facilitate the adoption of cryptocurrencies by institutions and consumers alike.
The history of Bakkt
Bakkt was founded in August 2018 by the Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange (NYSE). The company was created with the goal of providing institutional-grade infrastructure for digital assets, including cryptocurrencies like Bitcoin.
Bakkt’s launch was initially delayed due to regulatory hurdles and other challenges. However, the company eventually received approval from the Commodity Futures Trading Commission (CFTC) to launch its Bitcoin futures contract, which went live in September 2019.
In addition to its futures contract, Bakkt has also launched a platform for institutional investors to buy, sell, store, and spend Bitcoin and other cryptocurrencies. The platform offers custody services, which means that it securely holds its clients’ digital assets on their behalf. Bakkt has also introduced a consumer app that enables users to buy and spend cryptocurrencies at merchants that accept them.
Bakkt has continued to expand its offerings and partnerships since its launch, working with major financial institutions and technology companies to increase the adoption and integration of digital assets in the global economy. The company has also raised significant funding, with investors including M12, Pantera Capital, and Galaxy Digital.
How Bakkt works
Bakkt works by providing a platform for the trading, storing, and spending of digital assets, including cryptocurrencies like Bitcoin and Ethereum. Here’s a brief overview of how each of Bakkt’s services works:
- Trading: Bakkt offers a regulated exchange for trading Bitcoin futures contracts. These contracts enable traders to speculate on the price of Bitcoin, with settlement occurring in Bitcoin rather than cash. Bakkt’s futures contracts are physically settled, meaning that actual Bitcoin is delivered upon expiration of the contract.
- Custody: Bakkt provides institutional-grade custody services for digital assets, which means that it securely holds its clients’ cryptocurrencies on their behalf. The company uses multiple layers of security to protect its clients’ assets, including cold storage, multi-signature wallets, and insurance coverage.
- Spending: Bakkt has also introduced a consumer app that enables users to buy and spend cryptocurrencies at merchants that accept them. The app works by converting cryptocurrencies into fiat currency at the point of sale, enabling users to make purchases using digital assets. Bakkt’s app also provides users with rewards and loyalty programs for using digital assets, further incentivizing their adoption.
Overall, Bakkt’s platform aims to provide a seamless, trusted ecosystem for digital assets, which will facilitate their adoption by institutions and consumers alike. By offering a range of services, from trading and custody to spending and rewards, Bakkt is working to make digital assets a more integrated and mainstream part of the global economy.
Does Bakkt charge a fee
Yes, Bakkt charges fees for its services, which vary depending on the specific service being used. Here’s an overview of the fees charged by Bakkt for its main services:
- Trading: Bakkt charges a trading fee of 0.50 basis points (0.0050%) for its Bitcoin futures contracts. This fee is applied to both the buyer and the seller of the contract.
- Custody: Bakkt’s custody fees vary depending on the volume of digital assets being stored. For example, the company charges a monthly custody fee of $125 for clients with less than $500,000 worth of assets, and a fee of 0.025% per month for clients with more than $20 million worth of assets.
- Spending: Bakkt’s consumer app does not charge fees for buying or selling cryptocurrencies. However, there may be transaction fees associated with using the app to make purchases at merchants that accept digital assets.
It’s worth noting that Bakkt’s fees are generally in line with industry standards for similar services. However, it’s always a good idea to review and compare fees before using any financial service.
Can Bakkt be trusted
Bakkt is a subsidiary of the Intercontinental Exchange (ICE), which is a publicly traded company and the parent company of the New York Stock Exchange (NYSE). As a regulated financial institution, Bakkt is subject to oversight by regulatory authorities and is required to adhere to strict standards for security, transparency, and customer protection.
Bakkt has taken several steps to ensure the security and integrity of its platform and services, including using multiple layers of security for its custody services, obtaining insurance coverage for its clients’ digital assets, and partnering with reputable financial institutions and technology companies.
In addition, Bakkt has a strong reputation in the industry and has received investment and support from major players in the financial and technology sectors, including M12, Pantera Capital, and Galaxy Digital.
While no financial service is completely risk-free, Bakkt has demonstrated a commitment to providing a trusted and secure ecosystem for digital assets, which should give users confidence in its reliability and integrity.
How to use Bakkt step-by-step guide
Here is a step-by-step guide on how to use Bakkt:
- Sign up for an account: To use Bakkt’s services, you’ll need to create an account on its platform. You can do this by visiting the Bakkt website and clicking on the “Sign Up” button in the top right corner. Follow the prompts to provide your name, email address, and other required information, and create a password.
- Complete verification: After signing up for an account, you’ll need to complete the verification process to comply with regulatory requirements. This may involve providing additional personal information and documentation, such as a government-issued ID or proof of address.
- Fund your account: Once your account is verified, you can fund it with digital assets or fiat currency. To do this, click on the “Deposit” button in your account dashboard and follow the prompts to select your preferred funding method and transfer your assets.
- Trade or store your assets: Depending on your needs and preferences, you can either trade your assets on Bakkt’s exchange or store them in its custody services. To trade, navigate to the “Trading” section of the platform and select the Bitcoin futures contract you want to trade. To store, select the “Custody” section and follow the prompts to deposit your assets into Bakkt’s custody.
- Spend your assets: If you want to spend your digital assets at merchants that accept them, you can use Bakkt’s consumer app. To use the app, download it from the App Store or Google Play, sign in with your Bakkt account credentials, and follow the prompts to link your account and start spending.
It’s worth noting that the specific steps and requirements for using Bakkt may vary depending on the service and jurisdiction. Be sure to review Bakkt’s website and documentation carefully before using its services, and contact their customer support team if you have any questions or issues.