Bakkt and Galaxy Digital Team-Up on New Institutional Offering

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Galaxy Digital’s trading engine will be paired with Bakkt’s custody services in a collaborative effort to meet institutional demand for Bitcoin.

The Intercontinental Exchange’s digital asset custody and derivatives platform Bakkt has partnered with crypto asset manager Galaxy Digital to launch a ‘white glove’ service for institutions seeking Bitcoin (BTC) exposure.

The collaboration will see Galaxy Digital Trading’s (GDT) matching engine and trading platform offered alongside Bakkt’s digital asset custody services. 

“We designed this partnership to service the uptick in demand our two firms have received from traditional asset managers seeking access to physical Bitcoin,” said Galaxy Digital’s Tim Plakas.

“Together, Galaxy Digital and Bakkt offer a safe, efficient, and well-regulated route into physical bitcoin access,” Plakas added.

Galaxy Digital and Bakkt team up

In an interview with Bloomberg, Bakkt’s custody head John Conneely said the partnership was established in response to strong institutional demand for crypto asset exposure

The partnership will see GDT source liquidity from over 30 market makers, with trading taking place 24 hours a day, 365 days per year. GDT generated over $1 billion in digital asset volume during the first quarter of 2020 spanning its spot, lending, derivatives, and structured crypto products.

“Asset managers and hedge funds considering this service can be assured by the high standards we hold as a publicly-traded company with audited, public financial statements and an institutional-sized balance sheet,” noted Plakas.

Bakkt warehouse

Since launching its ‘Bakkt Warehouse’ last year, the ICE subsidiary has on boarded over 70 clients for its custody services.

Bakkt uses a combination of warm and cold storage to secure funds, with the majority of capital stored offline. Funds stored in the Bakkt warehouse are covered by a $125 million insurance policy, with customers able to purchase more than $500 million in additional coverage.