Bakkt, the physically backed bitcoin futures platform that was set to launch January 24, has been delayed once again after the US Commodity Futures Trading Commission (CFTC) failed to grant approval in time. This delay represents the second time the project has been put back, following the postponement of the December launch for Bakkt last year, but the lack of a reaction in the market suggests that the news was almost anticipated.
Government Shutdown Hits Home
Bakkt released news of the delay on New Year’s Eve, with the US in the middle (or maybe the beginning) of a government shutdown, meaning that the usually glacial pace at which such agencies work is even more restricted at present. For this reason the timescale for approval, assuming it will come, really is unknown. The only timeline Bakkt would offer was laid out in the opening statement of their notice:
Following consultation with the Commodity Futures Trading Commission, ICE Futures U.S., Inc. expects to provide an updated launch timeline in early 2019, for the trading, clearing and warehousing of the Bakkt Bitcoin (USD) Daily Futures Contract. The launch had previously been set for January 24, 2019, but will be amended pursuant to the CFTC’s process and timeline.
Not all Bad News
To counterbalance news of the delay, CEO Kelly Loeffler simultaneously released a report that outlined the progress of the first round of funding for Bakkt. This revealed that twelve partners and investors, including Pantera Capital, CMT Digital and Microsoft, had stumped up $182.5 million to fund the initial stages of the project. According to Loeffler, these funds will help pay for “…new infrastructure, including the industry’s first institutional grade regulated exchange, clearing, and warehousing services for physical delivery and storage.” You have to think that these companies wouldn’t put their names, or their checkbooks, behind such a program if there was a chance it might not get regulatory approval.
Feet on the Ground, but Looking at the Stars
Loeffler may have high hopes for Bakkt, but in a sign of the negative sentiment still facing Bitcoin and its connected enterprises, she also stated that, “Few innovations reached their full potential in their first decade of development”, adding:
Market quality, regulation, scale, security, and utility are critical for establishing a strong foundation where innovation can flourish. Our first step is to establish the trust and infrastructure that builds confidence and grows participation at the institutional and merchant level.
This balance of ambition and realization bodes well for the project, and potentially for the market as a whole. But, until Bakkt actually launches, concerns will remain over its readiness for the market.