Bakkt and Galaxy Digital Launch Joint Trading and Custody Service

Two of the largest institutional investment platforms in the crypto space have announced a partnership to target their prime market. Earlier this week, Galaxy Digital and Bakkt announced the launch of a joint trading and custody service that will help improve institutional investors’ access to digital assets.

Easy Crypto Access for Institutional Investors

According to a press release published yesterday, the joint service will see Galaxy Digital join its Galaxy Digital Trading (GDT) matching engine with Bakkt’s Warehouse custody service. By combining these two, both companies believe that they will be able to improve institutional investors’ exposure to the asset class and invest seamlessly.

In the press release, Tim Plakas, the Head of Sales at Galaxy Digital Trading, said:

“We designed this partnership to service the uptick in demand our two firms have received from traditional asset managers seeking access to physical Bitcoin. Together, Galaxy Digital and Bakkt offer a safe, efficient, and well-regulated route into physical bitcoin access.”

The prospect of two fierce competitors combining forces is an exciting one. Both firms have worked to gain more market share in the institutional crypt investor space, and it will be interesting to see how this new partnership works.

Speaking in an interview with Bloomberg, Bakkt’s custody head John Conneely explained that the platform was developed as part of their move to capture a renewed interest in crypto from institutions. Through this partnership, GDT will source liquidity from over 30 market makers, with trades taking place 24 hours a day.

GDT reportedly generated over $1 billion in digital asset trading volumes during the first quarter of the years, even despite the pandemic. The service spans spot, lending, derivatives, and structured crypto products.

As for Bakkt, the company’s custody service continues to grow. Bakkt launched Warehouse last year, with the service applying both cold and warm storage to keep funds. Funds stored are covered by a $125 million insurance policy, while customers can also purchase over $500 million in additional storage.

The company has revealed that over 70 clients now use Bakkt for custody services.

Bakkt and Galaxy Digital are Coasting Off Resurgent Months

This collaboration is coming on the heels of significant wins for both companies. For Bakkt, the company was able to produce $34 million in its physically-settled Bitcoin futures last month – compared to its cash-settled futures, which delivered just $9.3 million in volume.

The month also saw Bakkt record a daily record for physically-settled futures, standing at $43 million. The trend does lead many to believe that institutional investors are indeed flooding the market once more. As for Galaxy Digital, the company is also making strides outside the United States. The firm got accepted into the Toronto Stock Exchange’s (TSX) sandbox last month, hoping to get into the senior platform within the next year.

Announced last April, the sandbox offers a testing space for new policy development and companies looking to get listed on the main TSX. As long as Galaxy Digital trades for a year without any significant compliance issue, the firm should see acceptance into the central trading platform.