Bitcoins could become "digital gold", but they must first be used on a daily basis, said the managing director of Intercontinental Exchange.
During a quarterly earnings conference call on Thursday, Jeffrey Sprecher, Director of ICE, said that he considered the use of transactions as a prerequisite for bitcoin to become a store of value to long term. The company's Bakkt subsidiary, which operates a bitcoin futures market, announced this week that it is developing an app that allows consumers to buy products from merchants, starting with Starbucks.
A number of Bakkt employees are already considering bitcoin as digital gold, Sprecher said. (It should be noted that a large part of the current Bitcoin community exists.) For him, it is premature.
"Because I am old, I think (how) that gold has become a store of value because at one point it was a currency," he said. "We had gold coins, they were in circulation and, with time, because of the nature of their ability to spend, … they became a store of value and today, you know, in a crisis, we all accept gold as a form of payment. "
Bitcoin could follow a similar trajectory, said Sprecher, citing his development and mining capabilities. He added:
"We do not think that all this space will be relevant and will expand unless there are real use cases and we think … that a use case is a digital transfer of value by through payments. "
But unlike Bitcoin critics, Sprecher sees this as plausible. "It may well be that instead of converting bitcoin into fiat money and then using this fiat money to buy goods and services, merchants and users will accept bitcoin directly," he said. declared.
Parties trading directly with bitcoin would avoid the foreign exchange costs associated with the round-trip conversion between trusts. Bakkt seeks to serve this market by creating a digital platform facilitating these transactions.
ICE (which also owns the New York Stock Exchange) has about 50 people working on Bakkt's payment infrastructure. The company is targeting a launch date in early 2020 for its mainstream application.
Sprecher also explained the boost given to Bakkt for the launch of the bitcoin options, which the company plans to do in December.
Financial institutions are still reluctant to enter the space, and many are waiting to see how regulators approach crypto first, he said. Bakkt hopes to tackle this problem by providing a more regulated environment in the bitcoin ecosystem.
"You know, global retail retail customers are very comfortable, no matter the reason, that they are early adopting unregulated platforms that call stock exchanges, but do have in place reality of any particular regulatory oversight, "he explained. "We believe that it is possible, with Bakkt, to turn all this into a more transparent regulatory footprint and bring our expertise."
Bakkt launched its flagship bitcoin futures last month last month after more than a year of work on regulatory approvals and the development of its platform. Although the company initially saw a small volume for its bitcoin futures, the trade has recently revived.
"It turns out that the way we launched our Bitcoin futures contract is that we are a source of price discovery because we are physically delivered," said Sprecher, which means that contracts are paid in bitcoins rather than # 39 in dollars.
"We do not depend on prices coming out of these unregulated spot markets," he said, referring to the cash exchanges that dominate the market. "We are developing our own settlement price, which lends itself very well to an options market where people who are trading options and who are hedging with the underlying can benefit from perfect coverage in a place that they know transparent.
"So it was the pressure that led to the quick choice of options," he said.
Image of Jeffrey Sprecher via CoinDesk Archive