Bakkt and Galaxy Digital team up for a new crypto service

Bakkt and Galaxy Digital team up for a new crypto service
Written by:
Ali Raza
June 15, 2020
  • ICE's Bakkt and Mike Novogratz's Galaxy Digital teamed up to start providing 'white-glove' BTC service.
  • The new partnership comes due to the demand for crypto solutions by major institutions.
  • Despite crypto volatility, the interest seems to be on the rise, even among "institutions with a capital 'I'.

Billionaire Mike Novogratz’s Galaxy Digital Holdings recently partnered with Bakkt, Bitcoin futures exchange launched by the Intercontinental Exchange (ICE). The two now aim to start offering ‘white-glove’ Bitcoin service that would target large asset managers.

Demand for crypto solutions on the rise

According to Galaxy’s New York-based OTC trading desk’s head of sales, Tim Plakas, there are multi-billion-dollar asset managers from traditional finance who wish to buy and sell BTC. In fact, the asset managers’ interest in Bitcoin as a store of value skyrocketed recently.

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The biggest reason for this is believed to be the still-ongoing economic uncertainty, kickstarted by the coronavirus outbreak. Meanwhile, cryptocurrencies saw a much better performance, which drove numerous traditional finance giants towards them.

One example is hedge fund manager Paul Tudor Jones, who admitted to becoming a Bitcoin holder. Such a statement from him only added more fuel to the fire, and demand for crypto derivatives spiked.

Bakkt’s head of custody business development, John Conneely, stated that “This partnership that we put in place was really in response to demand we’ve been seeing in the last three months from institutions with a capital ‘I.’” Of course, neither firm disclosed which institutions requested such services.

Even so, the fact that there is such demand is interesting in itself. After all, cryptos are known for being highly volatile. They saw a major crash in March. Then, a recovery came. These days, BTC is 33% higher than it was when the year started.

Different views on the crypto market

Meanwhile, Goldman Sachs recently stated that it does not consider Bitcoin to be an asset class, and it recommended that investors avoid it. The market is filled with different views on the crypto industry, which is what Plakas himself admitted.

Despite this, the demand is there, and the new partnership will allow institutions to only sign up once in order to work with both companies. Meanwhile, both partners will be able to address clients’ needs simultaneously. While partnering up for this service is a new development, these firms are no strangers. Galaxy is one of Bakkt’s investors, and they collaborated for months already.