Intercontinental Exchange subsidiary Bakkt raises $182.5M to build its cryptocurrency exchange; sources: regulatory hurdles delay its plans for bitcoin futures
Frank Chaparro / The Block :
Context & Ripple Effects
Bakkt enters 2019 with $182.5M in hand and an unresolved problem: its flagship product — physically-settled bitcoin futures out of ICE — is stuck behind regulators rather than engineering. The raise buys time to keep building the exchange while New York state decides on approval.
That bet pays off within months: sources put Bakkt at around a $740M valuation by March, NY approval clears the way for the Sept. 23 futures launch, and the same regulatory greenlight carries into an institutional custody business that November. A $300M Series B follows in early 2020.
First-order effects
- Bakkt gets runway to finish its crypto exchange, but the reported regulatory holdup defers its bitcoin futures revenue stream — the product ICE built the vehicle around.
- Institutional counterparties waiting on Bakkt face a two-track reality: trading products slip, while the compliance work needed for NY approval advances.
Second-order effects
- Regulators become the de facto product managers — Bakkt's eventual Sept. 23 launch date comes only after NY state's financial sign-off, so approval cadence, not competition, sets the roadmap.
- ICE's willingness to fund through the delay signals to other incumbents that regulated crypto infrastructure is worth patient capital, pressuring rivals to match the custody-plus-futures stack rather than spot trading alone.
Third-order effects
- If the pattern holds, exchange groups stop treating crypto as a side desk and build it as core market structure: ICE's later moves — a board seat at OKX at a $25B valuation and Bakkt's push into stablecoin infrastructure via Distributed Technologies Research — extend exactly this playbook.
- Approval-gated launches favor deep-pocketed parents over startups, concentrating crypto derivatives among firms that can absorb long regulatory timelines.
The trend: Traditional exchange incumbents are converting balance sheets into regulated crypto infrastructure, with state and federal approval timelines replacing speed-to-market as the competitive axis.