Bakkt: What Should We Expect From an Exchange Tailor-Made for Wall Street Investors?

Last week, the CEO of the Intercontinental Exchange said that the firm's digital asset platform, Bakkt, is expected to launch later in 2019.

Bakkt is a digital assets platform created by ICE, the Atlanta-based operator of 23 major international exchanges, including the New York Stock Exchange, which is by far the world's largest exchange, trading nearly 1.5 billion shares a day.

The list of Bakkt's investment partners famously includes Microsoft, Boston Consulting Group, and Starbucks, along with an array of Wall Street players such as Fortress Investment Group, Eagle Seven, Susquehanna International Group, Galaxy Digital, Horizons Ventures and Pantera Capital.

"Institutional investors who are strongly considering crypto would probably feel more comfortable with investing via Bakkt or other major banks. However, the entrance of ICE to this market will not change the volatility of the coin markets. At the end of the day, investing in digital currencies is investing in the likelihood the nodes and use will still be there in the long term, and no one knows how to answer that nowadays."

Bakkt plans to debut physical BTC futures contracts on its platform.

Once the market closes, the ICE clearing house - which is an intermediary between the buyer and the seller - arranges to transfer the cash from the buyer's to the seller's bank account, while the BTC tokens are moved to the Bakkt digital warehouse, where they can be picked up by the buyer.

To prevent security breaches - which remain one of the most feared problems for cryptocurrency exchanges - Bakkt plans to store the private keys offline in its reportedly heavily guarded "Warehouse," which essentially resembles cold wallets.

Besides establishing a platform for institutional investors who are still hesitant to enter the crypto market, Bakkt's founders - Loeffler and Sprecher - also hope to make BTC payments more common, as they told Fortune.

Bakkt's launch has been postponed several times now, which can hardly surprise the crypto community, who are used to various differals regularly announced by major industry participants, such as the U.S. Securities and Exchange Commission and Ethereum developers.

"And finally, our investment in Bakkt will generate $20 million to $25 million of expense based upon the run rate in the first quarter. We will update you on progress at Bakkt and the level of investment as we move through the year."