Bakkt, the cryptocurrency venture backed by Intercontinental Exchange, announced Monday the launch of its institutional custody business.
In a blog post, the company said the Bakkt Warehouse, which until now stored the bitcoin tied to its futures product, would open its doors to clients looking to “safeguard their assets using Bakkt’s enterprise-grade offering.” Bakkt’s custody ambitions have been well-documented, but approval from the New York Department of Financial Services (NYDFS) will allow the firm to officially launch the business.
In August, The Block reported Bakkt would “soon open their doors to hedge funds, asset managers, and other clients.” To start, Bakkt will offer its services to Galaxy Digital, Tagomi, and Pantera Capital.
Bakkt Warehouse is entering a market with a fair amount of competition, including Fidelity Digital Assets, which fully rolled-out its platform in October, as per the Financial Times. There’s also Coinbase Custody, which now manages over $7 billion thanks in part to its acquisition of Xapo’s institutional business. Coinbase Custody launched in 2018.
The Xapo deal was also being considered by Fidelity, a sign of the mounting competition in what many consider to be the most crowded corner of the digital asset market. BitGo, which competes fiercely with Coinbase on several accounts, is arguably the most established firm in the market. It counts Goldman Sachs as a backer and at one point, was working on a proof of concept with the bulge bracket bank, sources say.
At the same time, new entrants promising sexier tech are looking to snag market share from rivals with bigger names. Anchorage is looking to take on the “old guards” cold storage approach to custody with a newfangled offering,