This article will be important, because the infrastructure that is starting to be build is fundamental to the future of cryptos (Bitcoin is the most important one). I will try to point out the more important ones and this infrastructure is positive for cryptos ! Do not expect prices to soar quickly, these things take time (years), but if you are a long term hodler, I believe you are going to be rewarded handsomely for it.
- BAKKT (ICE, Intercontinental Exchange) is a platform that allows to buy, sell and store Bitcoin for institutional investors, but also consumers. They aim to bring trust (very important) to digital assets like Bitcoin. This is where the big money will come in, in the future. When it launched, people were disappointed, because the volume was low. Furthermore people scream failure, but the truth is, these things take time to build itself. Volume will not just ramp up like that. Institutional investors take their time to see what the crypto market is doing (developments) and they have patience. Volume on this platform is already rising and in the next years this should only continue to climb. BAKKT is also offering cash settled futures now, which means you do not own Bitcoin when you enter a future contract, you just bet on the future price of Bitcoin and you get paid in cash or you have to pay cash. They also offer custody which can be important, since it is not always easy for people to own cryptocurrencies (buy them on exchanges like Coinbase or Binance, then sending it over to a Ledger Nano S for example, these things are not easy for everyone). It will be a lot easier to hold it in custody at BAKKT, who has already proven itself in the big financial world to be reliable. On the contrary this means you actually do not hold crypto yourself (own private keys), which is one of its purposes.
- BAKKT and Starbucks are going to work together to accept Bitcoin. This could happen as early as mid-2020 and BAKKT will have an app which can be used in Starbucks so that you can buy coffee with your bitcoins. This is a big step in accepting bitcoin as a means of payment and retailers will get more exposed to Bitcoin. In the future you should see other cryptocurrencies being accepted as well. A lot of people will wonder who is going to pay with Bitcoin to get coffee, but I think the exposure that Bitcoin will get from this is more important for now. We need retailers to see that Bitcoin is here to stay and is developing in the mainstream.
- Fidelity was one of the first platforms to launch itself in the crypto world for institutional investors. They aim to provide solutions like custody (cold storage) and buying/selling digital assets to institutional investors. What is important to notice, is that this type of service is available for stocks, bonds and other asset types. They do now like to enter in digital assets which is a huge boost, because this means they see cryptocurrencies as an asset class ! Fidelity has more than 7 trillion in custody, which is huge. If you look at their development/roadmap, you can see they already started a research in 2014 for cryptos. This should show you, that it takes years to build an infrastructure and it will not happen in a day or week.
- Banks are starting slowly to realize that they cannot fight cryptocurrencies and that they should maybe embrace it. ING bank (Dutch bank) is an example of a bank that is looking into offering custodial solutions for storing your crypto. This could already be happening in 2020 and they have around 1.1 trillion in assets which is big. The question is, will they charge you money for keeping your cryptos safe ? Citibank is another example that came in the news in 2018 that it is looking into offering custodial solutions for cryptos. I believe we will see more banks coming in the picture in the upcoming years.
- Grayscale investment Trust was established in 2013 and is seen as a trustworthy company to take care of your digital investments. You can choose to diversify your investments in large cap cryptos like Ethereum, Litecoin, XRP, Bitcoin Cash, but Bitcoin remains number one. They will take care of your investments and they believe that cryptocurrencies will transform the financial world.
- Square is a company that focuses on mobile payments, financial services and tries to be a good solution for merchants. The CEO of Square is Jack Dorsey (also CEO of Twitter) and he believes that Bitcoin will become the “internet of money”. They recently won a patent (US patent) that will create a new network of easy crypto-to-fiat transactions. This is big news as well because it would mean that it will get easier to transact all over the world. In the future you will be able to choose whichever currency you want to give to a merchant (FIAT or cryptocurrencies) and the merchant can transform this in whichever currency they want. It will make things a lot easier and gives a huge boost to cryptocurrencies as a payment method.
- The Chicago Mercantile Exchange (CME) wants to double their futures contracts, because they see growth in this market and the future contracts are rising in volume. CME came into play at the end of 2017 when Bitcoin hit its top and a lot of people blame CME for the downfall. Now CME wants to double their contracts and it might scare some people. The halvening is coming up and generally it means that the BTC price would rise in value. A logic conclusion for CME would be to double their contracts, otherwise they would offer low value contracts, which will not interest institutional investors.
All of these things are showing one thing : there is interest in Bitcoin and cryptocurrencies and big players are creating an infrastructure for this market. They will not invest a lot of money if they do not believe that the crypto market has a future. This is great news for our hodlers !
In my next article I will talk more about Central banks, money printing, debt and other things that will lead as well towards a rise in cryptos.
This is not financial advice and I am not a financial adviser. Do your own research and make your own decisions.