Bakkt Launches Its Bitcoin Custody Service

Bakkt

The good news for Bakkt continues with New York regulators greenlighting Bakkt’s Bitcoin Custody Service only a few short weeks after trading on Bakkt officially started. This new “critical” feature, as the community calls it, is supposed to be the missing link for widespread Bitcoin adoption.

Bakkt informed the community that it had received the greenlight from NY regulators in a blog post on November 11 and described the feature as “the critical link in the institutional adoption of Bitcoin.”

Will institutional money now flow into Bitcoin? While the custody feature of Bakkt is indeed a critical feature for institutional investors, it does not mean that institutional money will start to flow into the market right away. It only means that these types of investors now, for the first time, have all the tools they need to be able to invest in Bitcoin and not that they will do it now or in the future.

Will Bitcoin go to the moon with institutional money?

If institutional money starts flowing into the market, we will likely see a steep market cap increase for Bitcoin as institutional investors usually invest relatively large sums when compared to even large whales in the crypto market. Just a few large institutions would have the potential to create a significant shortage of BTC

The mere fact that institutional money could now flow into the market will likely not lead to significant price action for Bitcoin. While the custody feature is indeed an important milestone for institutional investing, it was only a matter of time until Bakkt would receive the go-ahead from New York regulators. It is unlikely that the price of Bitcoin will move a lot as this development is at this stage, neither unexpected nor game-changing. Even several hours after the announcement, Bitcoin is still trading around its 7-day low.

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