The bear market for cryptocurrency in 2018, which many analysts are referring to as the ‘crypto winter,’ proved fortuitous for at least one investment platform. While coin prices plunged over 80 percent across the board for top cryptocurrencies, the parent company behind forthcoming trading platform Bakkt used the opportunity to accumulate digital assets at a discount.
According to a report by Reuters, Intercontinental Exchange Inc (ICE), the company behind institutional cryptocurrency trading platform–which counts Starbucks among its proprietors–took advantage of 2018’s crypto winter to purchase coins at depressed prices.
Jeffrey Sprecher, ICE’s chief executive officer, allegedly told Reuters “it’s really been helpful that the cryptocurrency industry sort of went into what they call a winter.” Sprecher is referring to the severe bear market for cryptocurrency throughout 2018, which saw BTC prices fall to a relative low of $3000 after reaching nearly $20,000 just a year earlier.
While Bakkt has garnered substantial interest from both institutional investors and the broader commerce market, the exchange has experienced a series of delays. Originally set to launch in January 2019, the trading platform has been delayed to the middle or end of the year following a series of conversations with the Commodity Futures Trading Commission. Bakkt, in addition to offering institutional support for cryptocurrency trading, is planning to become fully compliant with the CFTC in order to integrate futures contracts for Bitcoin and other digital assets–a process that has delayed that launch of the exchange as the regulatory details are sorted.
However, the delayed launch has afforded the Intercontinental Exchange to continue acquiring cryptocurrency and blockchain firms it may not otherwise have had the opportunity for. Earlier in the week, Bakkt reported that it had acquired cryptocurrency custodian service company Digital Asset Custody Company, an acquisition that Sprecher alluded to when he commented on the benefits of delaying Bakkt’s launch,
“We’ve actually looked at a number of different companies and acquired a company earlier this week that wouldn’t have been available to us if the market had been really hot.”
While the crypto markets ended April on a high point, after over a year of falling coin prices, the last week has brought market volatility and a tumultuous time for cryptocurrency investors. Last week the New York Attorney General’s office accused stablecoin provider Tether and cryptocurrency exchange Bitfinex of foul play, claiming that the two had participated in defrauding investors and manipulating the marketplace for crypto. According to the filing, Bitfinex used Tethers funds to cover over $850 million in losses incurred by the exchange–funds that were specifically being held in reserve to back the dollar-valuation of USDT.
Earlier in the week, Tether’s lawyers responded to the ongoing legal case by claiming that the company held cash and cash-equivalent reserves to cover 74 percent of the USDT circulating on the market, with the difference in valuation covered by credit lines. However, many in the community of cryptocurrency have become frustrated with the company, who has historically positioned its stablecoin as backed 1:1 with U.S. dollars.
Nonetheless, the price of Bitcoin and other top cryptos continues to rise, with BTC up 3 percent on the day.