BCG backs Bakkt as PwC tips big year ahead for crypto sector

03 January 2019 Consultancy.asia

Cryptocurrency bourse Bakkt has been backed to the tune of $182.5 million in a funding round featuring big name investors including Boston Consulting Group – as PwC Asia crypto leader Henri Arslanian predicts a big year ahead.

Established by NYSE parent Intercontinental Exchange (ICE) and now set for a live launch early this year following recent regulatory delays, mainstream cryptocurrency futures trading platform Bakkt has closed a $182.5 million funding round with notable investors including Microsoft ventures arm M12, Hong Kong private investment firm Horizon Ventures, Galaxy Digital, and global strategy and management leaders Boston Consulting Group.

“Blockchain technology holds tremendous potential to enable new business models and trusted ecosystems,” said BCG Digital Ventures founder Sean Collins on the announcement of Bakkt in August, when BCG was named a partner alongside Microsoft and Starbucks. “By leveraging and developing fundamental market infrastructure, the Bakkt platform will enable firms across industries to accelerate a range of innovation.”

Designed as an ‘intermediary between traditional investors and the volatile cryptocurrency market, the launch of Bakkt is a significant step in bringing greater public and institutional credibility to cryptocurrency, which has gained ground over the past year despite hits to the market. “Notably, 2018 was the most active year for crypto in its brief ten-year history,” said Bakkt CEO Kelly Loeffler in a blog-post.BCG backs Bakkt as crypto market tipped for big 2019“This was evidenced by rising investment in distributed ledger technology and digital assets, as well as by blockchain network metrics such as daily bitcoin transaction value and active addresses. Yet, these milestones tend to be overshadowed by the more narrow focus on bitcoin’s price, which has been seen by some, as a proxy for the potential of the technology,” Loeffler continued, noting that previous technological advancements didn’t unfold in the age of Twitter.

The bullish sector outlook for 2019 is shared by crypto proponent and PwC Fintech & Crypto leader for Asia Henri Arslanian, who in an interview with Bloomberg cited the launch of Bakkt and involvement of other reputable financial players as a signpost for the positive road ahead, predicting that even more will jump on during the course of the year – given comfort by increased regulatory clarity as seen last year in Hong Kong, Switzerland, Gibraltar and Malta.

In terms of ongoing crypto-cynicism, fueled by a poorly performing market over the past year following incredible headlines declaring the digital currency’s all-conquering rise, Arslanian points to parallels in the evolution of Silicon Valley – suggesting the crash of bitcoin prices – exemplified by Bitcoin’s dive from ~$20,000 to $ 3,689 barely twelve months later – may actually serve to pave the way the forward.

“In other industries there are booms and busts, I think some of the positive news of the crypto fall was it actually cleared a lot of noise in the crypto sector,” Arslanian said. “Like in the dot com boom, you’ll have some companies that’ll survive this boom and those may change the world in ways we can’t even imagine today. But in the short term there’s definitely a lot of crypto companies that are hurt.”

Related: PwC Hong Kong follows EY Switzerland in accepting Bitcoin payment.

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