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A first architect of America's largest digital currency trading platform is changing teams. Adam White, who helped build Coinbase in a crypto-colossus with 25 million customers, joins Bakkt, the company launched in August by a consortium led by Intercontinental Exchange (market capitalization: $ 42 billion), parent company of the New York Stock Exchange, Chief Operations Officer.
Bakkt, with its deep ties to the titans of institutional investors on Wall Street, is proposing itself as an enterprise with an internal track to bring Bitcoin mutual funds and ETFs to the 401 (k) s ;America.
The announcement came on the morning of October 15 through a post on the blogging platform Medium of Bakkt's CEO, Kelly Loeffler. For sixteen years, Loeffler has worked alongside ICE founder and head Jeff Sprecher, who is also her husband, to assemble a highly regulated and traditional stock business empire, ETFs and commodities ranging from Brent to cotton. ICE exchanges are meeting places for Wall Street. (For more information, read "The NYSE owner is launching a startup exchange for Bitcoin.")
The news of White's rental has been reported previously from the cryptocurrency news site The Block. A Coinbase spokesperson said Fortuna, "We wish Adam the best and we are proud of what we call the" Coinbase Mafia ", an increasingly impressive group of pupils who are leading the space forward crypt."
A competition heats up
White's transition to Bakkt is the latest sign that old-school finance aims to be a leader in the transformation of Bitcoin and other digital tokens into liquid and widely tradable global currencies.
Until recently, criptovalute trading has been dominated by New School startups such as Coinbase, which originally dealt mainly with individual retail investors. More recently, the old guard and the new guard competed to better serve institutional traders, with the aim of obtaining the main asset managers, hedge funds and family offices by exchanging bitcoins, for example, on the same scale as share exchanges. and raw materials. At the start of this year, as reported by Fortune, Coinbase has exceeded a milestone, as the trading volume of its institutional clients has begun to surpass for the first time the retail trade. (Read "Coinbase wants to be too big to fail.")
Both Bakkt and Coinbase, along with other encrypted startups, are gearing up to serve institutional clients. Bakkt has an advantage, for the time being, because it will provide what is lacking today's locations and what Wall Street craves: to trade regulated trade at the federal level, as well as the compensation and custody of digital asset services on a par with the safeguards now protect transactions for the largest money managers.
In his first interview on the move, White spoke with Fortuna on his reasons for making the move that many crypto-purists could see deployed with the establishment. White was the fifth employee of Coinbase and served the head of the institutional product division for eighteen months. "I've had a front row seat for the last two years looking at the ever-changing opinions of cashiers and other big investors on cryptocurrencies," White said.
Adam White, a veteran of Coinbase, will join Bakkt as an operations director.
Courtesy of Bakkt
For White, it was clear that Wall Street was ready to pack digital resources for the masses, especially since cryptocurrencies were strongly used for millennials. "In 2017 I saw a big change," he says. "Interest in Bitcoin and other currencies began to change from retail to institutional, but the level of infrastructure of existing trading sites often did not meet their expectations, which is why they are waiting on the sidelines." The big banks, White said, needed exchanges that provided security equivalent to what they enjoyed in trading in stocks, bonds or gold. "That's why I joined Bakkt," says White.
The bear market is damned
White says that recent market trends give the false impression that investor interest in cryptocurrencies diminishes, when in reality institutions are more hungry than ever. Since last December, the price of Bitcoin has dropped from $ 19,000 to $ 6,200 and the total market value of all digital currencies has dropped by 70% to around $ 200 billion. "Too often, audiences look at the price and size of the market to determine progress in digital currencies," says White. Instead, White looks at what he considers the fundamentals, trading volumes and progress in technology.
"The cryptocurrency markets are following their path, we see bull and bull markets," he says. "But what matters is that the number of daily transactions for all cryptocurrencies has increased year on year, and we are also seeing the introduction of new protocols from open source software developers that make cryptocurrencies much easier to use. "He cited an example: the Liquid Network, an app presented last week that executes transactions instantly, eliminating the usual 10-delay between when customers make a purchase and when it is confirmed on the blockchain.
For Loeffler of Bakkt, the current and fragmented state of cryptocurrencies recalls the energy markets in the early days of the ICE. "The digital market is as fragmented as the energy market in the early 2000s. The ICE was the pioneer that attracted more and more institutions to trade in energy, which is what created the liquid market of today ", he says. "We are going to see a revolution on the same scale in cryptocurrencies".
At this time, Loeffler expects Bakkt to offer the institutions access to a complete package of regulated trading, clearing and custody in December on the commodity exchange of ICE Futures in the United States, subject to approval by the Federal Trade Commission of raw materials.
It is instructive that White, a pioneer in bringing digital currencies to buyers, is embracing the commercial establishment embodied by the ICE. If Bakkt delivers as Loeffler and White expect, and the great Wall Street starts to trade cryptocurrencies with the same ease, security and scalability of traditional stocks, bonds and commodities, it could be a huge leap forward in the evolution of cryptocurrencies .
TO UPDATE: The story has been updated to link to the story in which the news of Adam White's rental was reported for the first time.
