While the cryptocurrency market was busy closing out its worst year on record, some of the biggest names in traditional finance were quietly placing their bets on the future of digital assets. On December 31, 2018, Bakkt — the cryptocurrency platform backed by the parent company of the New York Stock Exchange — announced the completion of a $182.5 million funding round that sent a clear signal to the industry: institutional players are not backing away from crypto.
TL;DR
- Bakkt, created by Intercontinental Exchange (ICE), raised $182.5 million in its first institutional funding round
- Investors include Microsoft’s M12, Pantera Capital, Galaxy Digital, and Boston Consulting Group
- The funding was an equity round — not a token sale — signaling genuine institutional commitment
- Bakkt is awaiting CFTC approval for physically delivered Bitcoin futures contracts
- The platform is collaborating with Starbucks on consumer payment solutions
ICE’s Big Bet on Bitcoin
The Intercontinental Exchange (ICE), the corporation that operates the New York Stock Exchange and dozens of other global exchanges, created Bakkt in August 2018 with an ambitious mission: build a regulated platform where consumers and institutions could buy, sell, store, and spend digital assets. Six months later, Bakkt had assembled what CEO Kelly Loeffler described as a powerhouse coalition of investors willing to commit real capital during one of the darkest periods in crypto history.
The $182.5 million round was notable not just for its size — substantial in any market context — but for the caliber of its participants. Microsoft’s venture capital arm M12, Pantera Capital, Naspers’ fintech division PayU, Boston Consulting Group, Galaxy Digital (founded by billionaire investor Mike Novogratz), Horizons Ventures, Protocol Ventures, CMT Digital, Eagle Seven, and Goldfinch Partners all contributed. This was not a crowd of crypto enthusiasts throwing money at a whitepaper. This was Wall Street and Silicon Valley making a calculated infrastructure play.
Physically Delivered Futures: A Game Changer
At the heart of Bakkt’s initial plan was something the crypto market had never seen: a one-day physically delivered Bitcoin futures contract, complete with institutional-grade warehousing. Unlike the cash-settled Bitcoin futures launched by CBOE and CME in late 2017, Bakkt’s contracts would involve actual Bitcoin changing hands — a fundamental difference that could dramatically increase market transparency and price discovery.
The company had been working closely with the Commodity Futures Trading Commission (CFTC) throughout 2018 to secure regulatory approval. The Wall Street Journal reported that Bakkt’s futures contract was “poised for green light,” though the timeline remained dependent on the regulatory review process. The initial launch target of January 24, 2019 would ultimately be delayed as regulators took more time to evaluate the novel product structure.
Starbucks and the Consumer Vision
Bakkt was not just building for institutional traders. The company had already announced a partnership with Starbucks to explore how digital assets could be used in everyday consumer transactions. The vision was ambitious: imagine walking into a coffee shop and paying with Bitcoin through a seamless, regulated platform. While that reality remained distant, the Starbucks collaboration lent mainstream credibility to the project that few other crypto ventures could match.
COO Adam White, who joined Bakkt after serving as a senior executive at Coinbase, was tasked with bridging the gap between the traditional financial world and the emerging digital asset ecosystem. His presence signaled that Bakkt was serious about building compliant, user-friendly infrastructure rather than chasing speculative hype.
Why This Matters
The timing of Bakkt’s fundraising was almost poetic. Bitcoin closed 2018 at approximately $3,742, down more than 73% from its January opening of around $13,850. The total cryptocurrency market cap had collapsed from roughly $613 billion to approximately $130 billion over the course of the year. The ICO boom had turned to bust, mining operations were shutting down, and mainstream media had largely declared crypto dead for the hundredth time.
Yet here was the owner of the New York Stock Exchange, backed by Microsoft and a roster of blue-chip investors, pouring nearly $200 million into Bitcoin infrastructure. The message was unmistakable: while retail traders and speculators were fleeing, the smartest institutional money was building for the long term. Bakkt represented a thesis that the crypto market’s problems were not fundamental but infrastructural — and that with the right rails in place, digital assets would thrive.
Looking back, the Bakkt raise on the last day of 2018 serves as a powerful reminder that bear markets are where real businesses are built. The companies and platforms that survived the crypto winter of 2018 would go on to form the backbone of the next bull run, proving that conviction, not hype, drives lasting value in this market.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always do your own research before making investment decisions.
microsoft M12 and galaxy digital putting 182.5M into a crypto platform at the bottom of crypto winter was either visionary or insane. turns out both
182.5M raised and the actual product shipped 2 years late with a fraction of the volume they projected. Microsoft M12 must love that ROI
Rune H. the real story is Galaxy Digital got in at the floor and probably exited before the SPAC mess. Novogratz times these things better than anyone in crypto
microsoft and the NYSE parent company backing a btc platform in 2018. people really underestimated how early we were
physically delivered btc futures were the entire pitch and they botched the launch. volume was dead for months after sept 2019
physically delivered futures were the whole pitch. instead we got cash settled like everything else. the ICE backing was real but the execution was weak
dnw_ physically delivered futures was the whole promise. bakkt delivered cash-settled like everyone else
the starbucks partnership was the most underrated part. buying coffee with btc in 2019 sounded insane
still waiting for that btc coffee at starbucks lol. the partnership was announced in 2018
the starbucks partnership never went anywhere concrete. it was a press release, not a product. waited years for that btc latte
starbucks_punk that btc coffee promise in 2018 still stings. starbucks never actually accepted crypto payments
Microsoft M12 investing in Bakkt while everyone else was running for the exits in Dec 2018 tells you everything about who actually has conviction in crypto infrastructure
physically delivered BTC futures were the whole point. cash-settled CME futures launched and did nothing for price discovery. Bakkt was supposed to fix that
bakkt was supposed to be the institutional gateway. took them until 2021 to launch anything meaningful
bakkt launched physically delivered futures in sept 2019 actually. problem was nobody traded them. volume was embarrassing for months
Ralf M. institutional gateway? took them 3 years to launch anything useful. not exactly institutional grade
182.5M at the absolute bottom of crypto winter. Microsoft and Galaxy Digital either had insane conviction or insider info about the 2020 cycle. probably both
ice_age_ Galaxy Digital and Microsoft M12 backing a platform that took 3 years to launch a product nobody used. venture capital conviction doesnt equal product market fit
physically delivered futures was the entire pitch and they fumbled it. cash settled won because its easier and nobody actually wanted to take delivery. ICE backing couldnt fix that
Oskar N. physical delivery was dead on arrival. institutions wanted cash settled exposure not actual btc custody. CME figured that out first
Bea W. Microsoft M12 and Galaxy at the bottom of crypto winter 2018. everyone else was writing obituaries and they wired 182.5M. contrarian capital always wins
bakkt raised 182M from microsoft and galaxy and still couldnt ship. vc money without execution is just expensive failure
microsoft passing on btc treasury in 2024 after backing bakkt in 2018 tells you conviction lasted about 2 years lol
casper_v physically delivered futures was supposed to be the institutional on-ramp. Bakkt launched them a year late and volume was dead on arrival. CME won by default
182.5M equity round in the worst crypto winter on record and people still doubted institutional interest. Bakkt was never about retail, it was ICE positioning for the long game
Marcus Bouldin ICE spent 182.5M to wait 4 years for regulatory clarity. most funds would have marked that as a loss by Q2 2019
Starbucks partnership was the most underrated part of this. they were talking about consumer bitcoin payments in 2018. took everyone 6 more years to get there