Digital Assets: Galaxy Digital and Bakkt Launch a Bitcoin ‘White Glove’ Service For Institutions

June 11, 2020 | Digital Assets, Latest News, News
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The partnership will offer ‘best-in-class’ service for onboarding, trade execution, and storage of digital assets.

Galaxy Digital, owned by Mike Novogratz, and Bakkt, the bitcoin futures provider majority-owned by the Intercontinental Exchange, have teamed up. They plan to offer top-flight services to institutions and asset managers relating to bitcoin. (IBS Intelligence)

Galaxy Digital Trading, a unit of Galaxy Digital, will offer institutions market access and trading facilities. On the other hand, Bakkt Warehouse, Bakkt’s custody unit, will be responsible for the storage of their crypto assets.

Institutions show increasing interest in bitcoin

A recent report by Fidelity Digital Assets based on a survey of 800 institutions in the US and Europe found that a growing number of institutional investors believe that digital assets should be a part of their investment portfolios. In fact, about 80% of institutional respondents to the survey said they found something appealing about crypto assets.

Further, bitcoin was the digital asset of choice with more than 25% of respondents holding the cryptocurrency.

New crypto services targeting institutions

BEQUANT, the UK-based digital asset solutions provider recently introduced its prime broking services and announced a partnership with cryptocurrency marketplace OKEx for the launch of the service.

The collaborators intend to provide institutions with easier access to liquidity, custody, lending, and other products in the crypto space.

Galaxy+Bakkt: Asset managers show interest in bitcoin

Talking to Bloomberg, Tim Plakas, Head of Sales at Galaxy Digital Trading, said that the two top-bracket crypto players had teamed up to target “multi-billion-dollar asset managers from traditional finance.”

He revealed that the COVID-19 pandemic had spiked interest from asset managers in bitcoin as a store of value.

“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 Plakas in a statement. “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.

“Together, Galaxy Digital and Bakkt offer a safe, efficient, and well-regulated route into physical bitcoin access, one that has been already proven successful in the macro hedge fund space,” Plakas added.

Galaxy+Bakkt: Trading and custody

The partnership will see Galaxy Digital Trading source liquidity from over 30 market makers. Moreover, trading will take place 24 hours a day, 365 days per year. Galaxy will also provide access to sophisticated trading strategies across the whole gamut of trading, lending, derivatives, and structured products.

“Alongside our adoption of safekeeping requirements that are unique to the digital asset class and its infrastructure, the Bakkt Warehouse uses the same best-in-class, trusted enterprise security framework that protects ICE’s dozen exchanges around the world, including the New York Stock Exchange,” said John Conneely, Head of Custody Business Development at Bakkt.

More than 70 firms have already signed up for institutional bitcoin custody services at the Bakkt Warehouse. Crypto assets under custody are covered by a $ 125 million insurance policy. Customers have an option to purchase more than $ 500 million in additional insurance coverage.

Related Story:   Fidelity Report Says Institutional Adoption of Crypto Gaining Traction

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