ICE Creating New Cryptocurrency Market: A Double-Edged Sword

ICE’s announcement about building a new ecosystem for digital assets is a double-edged sword for cryptocurrencies. Photo credit: Shutterstock

Intercontinental Exchange (NYSE: ICE), parent of the New York Stock Exchange, today announced it is building Bakkt, a new ecosystem for cryptocurrencies, along with several partners. This is a major step in the mainstreaming of bitcoin and cryptocurrencies. But it’s also a double-edged sword, because it’s likely the beginning of Wall Street creating financial claims to bitcoin out of thin air (and not backed by actual bitcoins), which could offset some of Bitcoin’s algorithmically-enforced scarcity. Perhaps that’s why bitcoin’s price declined slightly after today’s announcement by ICE.

Positives

Bakkt is yet more evidence that incumbent institutions are increasingly taking the “join ‘em” approach to cryptocurrencies, as explored in Part 1 of my 3-part series about the building rivalry…