Crypto investment firm Galaxy Digital today announced a partnership with Bakkt, the crypto derivatives platform owned by the Intercontinental Exchange—the same company that runs the New York Stock Exchange. The pair have launched a “joint trading and custody service” for institutional investors trading Bitcoin.
Galaxy will handle the trading and access to the market—it will source money from over 30 venues and providers to keep the system running smoothly at all times—while Bakkt will offer its custody services through Bakkt Warehouse, which is regulated by the New York State Department of Financial Services.
“We designed this partnership to service the uptick in demand our two firms have received from traditional asset managers seeking access to physical bitcoin,” said Tim Plakas, head of sales at Galaxy Digital Trading, in a statement.
He added, “These funds expect the same caliber of market knowledge and trade execution expertise in BTC as they would expect from any established traditional finance desk, and Galaxy provides that, while Bakkt delivers the high level of regulatory-compliant security required for storing digital assets.”
The partnership shows there is a growing demand from institutional traders for Bitcoin. Galaxy traded over $1 billion worth of cryptocurrency in the first quarter of 2020. Bakkt raised $300 million in March; its custody services are used by over 70 clients (and comes with $125 million of insurance by default); and its derivatives platform yesterday traded $10.3 million worth of Bitcoin futures contracts.
ICYMI: Tuesday's Bakkt Bitcoin Monthly Futures:
Traded contracts: 1049 ($10.27 million, -13%)
All time high: 6601 (12/18/2019)
Open interest: $12.61 million (-5%)
— Bakkt Volume Bot (@BakktBot) June 10, 2020
Bakkt is also just about to release a new consumer app for handling digital assets. Looks like it’s tackling both institutions—and retail.