Bakkt is ready to store customers' bitcoin.
Intercontinental Exchange's bitcoin subsidiary announced Monday it would provide custody services for institutional clients. Pantera Capital, Galaxy Digital and Tagomi have already signed on as initial customers for "Bakkt Warehouse," with other "marquee firms" expected to join over the next few weeks.
When it first launched, Bakkt was only able to provide custody services to clients trading its bitcoin futures contracts. Monday's news comes amid an additional approval by the New York Department of Financial Services (NYDFS), which previously granted the company a trust charter.
In a blog post, Bakkt COO Adam White wrote that "a critical link ... in the institutional adoption of bitcoin is custody."
"When investors have ready access to regulated custodians whose security and processes they trust, the full potential of this emerging asset class and technology can flourish," he wrote, adding:
Bakkt employs a number of safeguards and security features, including "dedicated network connectivity between operational sites," redundant secondary facilities, geographically-distributed signing operations, independent reporting structures and a number of other features, White claimed.
There's also "24x7 video monitoring, armed guards and security operations and incident response teams," the post stated.
Bakkt has mentioned a number of these features before. The company is working with BNY Mellon to support its geographically separated key storage feature, according to a late August blog post.
While Bakkt had already secured insurance for up to $100 million in assets prior to its futures launch in September, the company announced Monday that "a leading global syndicate of insurers" is now providing it with a $125 million policy.
Bakkt's announcement Monday comes just weeks after the company said it would begin offering options on top of its existing bitcoin futures contracts, which in turn came less than a month after the company went live with its long-anticipated physically delivered offerings. The company has since announced it is developing a consumer app for users to purchase goods with bitcoin, starting with Starbucks, with a release date in the first half of 2020.
While a number of other companies are developing their own platforms for physically-settled bitcoin futures in the U.S., Bakkt has been the only one to launch so far.
CME Group, which has offered cash-settled bitcoin futures since December 2017 – meaning customers receive the fiat equivalent to the contract's value at expiration, rather than the actual bitcoin – also announced its intention to add options contracts on top of its futures recently.
The new products speak to a growing interest in bitcoin as an asset class from custodians, the companies have said.
"At Bakkt, we’re committed to expanding access to the global economy by building trust in and unlocking the value of digital assets," White wrote Monday.
CoinDesk's Michael Casey, Bakkt CEO Kelly Loeffler and ICE chairman Jeffrey Sprecher image via CoinDesk archives
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