The 2018 year will be remembered as one of the worst years for cryptocurrency investors. With cryptocurrency booming in 2017, it was only time for the bearish market to arrive. The price of Bitcoin, itself is a good indicator of how the cryptocurrency rollercoaster went through. It rose a high of $19K last year, only to fell around $4200 at the time of writing.
However, there is hope. The hope of a bear market and growth that everyone is waiting for. The two key players that we think that can change the whole crypto market is Bakkt and Fidelity. But, before we can try to understand their role in bringing the market back, we need to learn about them. Let’s get started.
Table of Contents
What is Bakkt?
Cryptocurrency volatility has its advantages and disadvantages. Traders who know what they are doing gain make a lot of money, but at a risk of losing money as well — also, the fact that cryptocurrency is not yet become mainstream due to many factors including regulations, volatility and reach.
Check out Bakkt as it aims to create an open cryptocurrency platform that will provide users the ability to trade and store their cryptocurrency. It is managed by the New York Stock Exchange which in return instill confidence in the project. Not to mention, some key players are already partnered with Bakkt to bring bitcoin or other digital currencies to the masses. This also means that institutional money can now flow into cryptocurrency creating tons of opportunities for traders.
They will also be trying to bring exchange-traded fund(ETFs). According to what we have seen until now, they have a better chance to getting ETFs as they have learned from the mistakes of Winklevoss brothers who are rejected due to them not addressing price volatility and over-reliance on futures derivatives.
What is Fidelity?
Fidelity, on the other hand, is in the news for opening their cryptocurrency trading and storage platform through Fidelity Investments. The firm is in charge of $7.2 trillion in client assets and will be handling custody for digital currencies including bitcoin. By doing so, they will be capable of trading on multiple exchanges on behalf of their clients and improve the trading of native digital assets.
At the moment of writing, Fidelity is only open for institutions which still makes it non-accessible to retail investors.
CNBC covered the news of their new platform here. In the news article, Abigail Johnson added, “Our goal is to make digitally native assets, such as bitcoin, more accessible to investors.”
The Current Challenges of the Crypto Market?
Now that we have a clear idea about Bakkt and Fidelity let’s list the challenges below. This will enable us to understand the current state of the market further.
- Lack of Liquidity: From the inception of cryptocurrency, the first thing that made it not ideal for the masses is its liquidity. Even institutions find it hard to invest and liquidate assets whenever needed.
- Volatility: Cryptocurrency has always known for its volatile nature. The prices rarely stay stable which makes the crypto market not an ideal ground for small investors.
- Unregulated: Cryptocurrency is completely unregulated which is obvious considering that it is decentralized. However, unregulated markets are avoided by both the institutional investors and regular investors as it comes with associated risks.
Lack of awareness and mass adoption: Even though crypto market boomed in the last year or so, it is still far away from mass adoption. The lack of awareness within the masses is a big challenge that the crypto market have to overcome if it needs to grow.
Could Bakkt and Fidelity End this Crypto Bear Market?
So, can Bakkt and Fidelity change the course of the crypto market? With all the available information, we firmly believe that their involvement can positively impact the market, even leading to a bear market. We think this because of the three main reasons.
Tons of capital inflow and improved liquidity
The first thing that we will witness is the large capital inflow that these two players will bring to the market. Both Bakkt and Fidelity are aimed to involve institutional investors into the crypto market which can bring trillions of dollars in no time, leading to an early bear market. Fidelity currently has 27 million, and it manages $7.2 trillion of customer asset.
Better mass adoption
Mass adoption is essential in bringing the market out of depression. Bakkt will play a significant role here as it will enable small investors to invest in cryptocurrency. They are partnering with Starbucks and Microsoft, and their role cannot be just ignored. Starbucks will aim to advertise cryptocurrency as a method of payment as it will be regulated and maintained by Bakkt. Microsoft’s role is also crucial as they will maintain the backend infrastructure. It will give the merchants an option to easily integrate cryptocurrency payments which in turn will influence more consumers.
Stability and Security
Bakkt and Fidelity, both aims to provide stability to the market. Bakkt especially can change the landscape as they are trying to get ETFs which will bring trust and stability to the market. Fidelity’s expertise with enterprise security will enable them to manage crypto assets much better. They are providing custody solution with impressive security.
Right now, we have enough information to speculate that the two players Fidelity and Bakkt can change the market for good. Their presence will bring not only trust but also stability which can steer away from the skeptics as well. Just like any market, bull and bear phase is part of the deal. However, each phase is impacted by the market sentiments and events. For the bear market to end, we need a healthy dose of positive news and market sentiments, and we think that Fidelity and Bakkt can play a crucial role.
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