On Friday (3 August 2018), hedge fund manager Brian Kelly, while appearing on CNBC's Fast Money, called Intercontinental Exchange‘s announcement about its upcoming Bakkt platform “Biggest News of the Year” and explained why.
Earlier in the day, as covered here on CryptoGlobe, Intercontintenal Exchange (ICE), the parent company of the New York Stock Exchange (NYSE), announced that, with the help of technology partner Microsoft, it was planning to launch a new digital asset platform called Bakkt.
Kelly explained that there were two main reasons for him calling this announcement the “biggest news of the year.”
1. “Paves the way for Bitcoin ETFs”
Kelly explained that last week he didn’t think a Bitcoin ETF would get approved by the U.S. Securities and Exchange Commission (SEC) this year—and in fact, the Winklevoss Bitcoin ETF got rejected by the SEC for the second time—for these reasons:
- There was/is not any U.S. regulated crypto exchanges.
- There were/are no U.S. regulated crypto custodians.
However, now, he feels that, assuming ICE, which plans to launch Bakkt in November, receives approval from the SEC, we will now have a U.S. regulated exchange trading Bitcoin with its own “licensed warehouse”, which should make it easier for a Bitcoin ETF to get approved.
2. “Best Thing Since Bitcoin ETFs”
Kelly said that what ICE is doing is even better than Bitcoin futures:
“[The] problem with Bitcoin futures is that there are a very limited set of people that can trade it… And a lot of people use it for hedging.”
However, he says that ICE is talking about getting Bitcoin into your 401k (in the U.S., these are tax-qualified defined-contribution pension accounts):
“They are talking about your Schwab or Fidelity or Ameritrade account… You are going to be able to buy a Bitcoin ETF, a Bitcoin mutual fund… It expands the universe.”
“Crypto Market Underpricing”
Lelly said that looking at today’s Bitcoin price movement (with Bitcoin trading around $7,408 at the time), the only conclusion he could make was that the crypto market was “completely missing this” and he reiterated that this was “very very big news.”
When asked if he really believed that ICE would be successful with its plan. He replied:
“Oh, yeah! Absolutely! I mean, they are talking about launching in November… They have been working on this in stealth mode for the last 14 months, they have already talked to regulators, they are ready to go.”
Finally, he was asked how come Bitcoin had not popped despite this excellent news. He answered:
“Back in January, Bitcoin would have gone up 20% on this news. So, I think the bear market has just broken people's spirit, frankly, and so people aren't really looking for this… A lot of people I talked to today hadn't seen the news–came out at 08:30 [UTC -04:00]–people hadn't seen it till 2, 3 in the afternoon. So, the market is still digesting this, and remember most of Bitcoin trading happens in Asia; so, it was released at 08:30 this morning, that's 09:30, 10:00 at night on a Friday night in Asia. [When] Asia wakes up, you might see this thing pop.”
Featured Image Credit: Image Courtesy of Intercontinental Exchange