Bakkt, Galaxy Digital link up to offer bitcoin services to institutional investors

Bakkt and Galaxy Digital have jointly created a new service directed at institutional investors looking to buy and store bitcoin (BTC).

Calling it a collaborative "white-glove" service, the two companies said they would handle the entire process of onboarding, trade execution, and storage of digital assets for institutional investors.

"We designed this partnership to service the uptick in demand our two firms have received from traditional asset managers seeking access to physical bitcoin," said Tim Plakas, head of sales at Galaxy Digital Trading.

Indeed, a recent Fidelity survey of 800 institutional investors found that nearly 80% of them are interested in digital assets. Last month, macro investor and hedge fund manager Paul Tudor Jones also made a strong case for buying bitcoin, saying that it can work as a hedge against inflation.

A recent uptick in bitcoin derivatives markets also suggests that more institutional investors are joining the space. The Fidelity survey found that the percentage of U.S. investors with exposure to crypto futures increased to 22% in 2020 from 9% in 2019.

Galaxy Digital and Bakkt look to jointly serve institutions, such as traditional finance asset managers and hedge funds. Galaxy Digital's trading unit saw more than $1 billion of volume in the first quarter of 2020, while Bakkt has onboarded more than 70 firms to date for its custody business.