Bakkt Says Latest Acquisition Will Help Its ‘Consumer Business’

On Monday (January 14th), Kelly Loeffler, the Chief Executive Officer (CEO) of Bakkt, a subsidiary of the Intercontinental Exchange (ICE), announced that Bakkt had acquired "certain assets of Rosenthal Collins Group (RCG), an independent futures commission merchant," a move that it hopes will "aid" its "consumer business."

Here is how Bakkt announced the news on Twitter:

In a post published on Bakkt's Medium blog a short time ago, the Bakkt CEO started by listing Bakkt's objectives:

"As those who’ve followed us since our first announcement in August know, our mission is to build the first integrated, institutional grade exchange-traded markets and custody solution for physical delivery of digital assets... In parallel, we’re building a secure, scalable platform for transacting with digital assets so that our regulated ecosystem serves consumers, merchants and institutions."

She then explained that while Bakkt is waiting for "regulatory approval by the CFTC" for Bakkt's physically-settled Bitcoin (BTC) futures contract, Bakkt had decided to acquire "certain assets" of RCG (including some of its employees), a transaction that Bakkt expects to close in February.

What is the point of this acquisition?

Loeffler explains:

"First, it will enhance our risk management and treasury operations with systems and expertise. Other aspects of the transaction will contribute to our regulatory, AML/KYC and customer service operations as we help enable digital asset acceptance by bringing more choice and control to buyers and sellers."

A report in Fortune, which interviewed the Bakkt CEO, says that this acquisition "confirms that the cryptocurrency trading company is speeding its plans to revolutionize the way people pay for everything from coffee to cars." 

Loeffler told Fortune:

“Typically when companies are combined you have overlapping systems, so we saw an opportunity to a purchase a portion of the back office operations, including compliance and treasury services, and risk management, as well as adding members of the RCG team.”

Fortune says that although "Rosenthal traditionally focused on the institutional side," Loeffler "emphasizes that Bakkt will use its expertise in an entirely new area to support its vision for streamlining payments between customers and merchants."  Loeffler is quoted as saying:

“It’s not so institutions can trade. The acquisition will aid our consumer business as we build Bakkt.”

The Bakkt CEO also told Fortune:

"The evolution of blockchain technology opens new possibilities for digital assets to serve as an an efficient payments mechanism at the consumer and merchant level."

"Think about today’s Starbucks app. You can pre-fund a prepaid or stored value card with a digital app. The first use case is to pre-fund the cards, with Bitcoin. The goal is to give consumers the choice between purchasing with digital or fiat currency.”

On 31 December 2018, Bakkt announced that in its first round of fundraising, had received $182.5 million from several partners and investors who also "believe in the future of digital assets."

Featured Image Credit: Photo via Pexels.com

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Coinbase Quietly Pulls the Plug on Its Cryptocurrency Bundle Product

Francisco Memoria

The San Francisco-based cryptocurrency exchange Coinbase has quietly pulled the plug on its Bundle product, which allowed users to buy a basket of cryptocurrencies with fiat.

According to an update on its FAQ page, the cryptocurrency exchange “deprecated” the Coinbase Bundle product, and all assets in it have been “redistributed to their respective individual asset wallets.”

The move, first spotted by Crypto Briefing, is believed to have been made because the product wasn’t a profitable one. Coinbase Bundle was launched back in September of last year to make it easier for investors to gain exposure to the cryptocurrency ecosystem, through a weighted basket of the cryptocurrencies the company then offered.

This means users could use a small amount of fiat to buy bitcoin, litecoin, ethereum, bitcoin cash, and ethereum classic at once. Per the exchange itself, the bundle’s purpose was to “make buying more convenient and less overwhelming.”

At the time, the exchange also launched other features: Coinbase Learn and new asset pages.

The timing was off, however, as the product was launched during the bear market that saw the price of most cryptocurrencies drop well over 80%. Images shared on social media in December of 2018, when bitcoin hit its $3,200 low, showed investing $100 on Coinbase would’ve led to significant losses only a few months later.

As covered, Coinbase recently launched a service offering its users four free exclusive “trading signals,” in a bid to help its customers “independently create and manage their own crypto strategy.”

It’s worth noting Abra, a digital asset exchange and wallet provider,  launched a product packaging various cryptocurrencies into one at about the same time Coinbase launched its Bundle product. Abra’s product is its BIT10 token.