Bakkt is partnering up with Mike Novogratz’s Galaxy Digital to launch a collaborative “white-glove service” for “multi-billion-dollar” asset managers looking to buy and store bitcoin.

As per the announcement that came on Wednesday, Galaxy Digital’s affiliate Galaxy digital trading is providing market access and trading capabilities while Bakkt Warehouse will safeguard digital assets for clients.

Galaxy is an investor in Bakkt and both have been collaborating for months. Bakkt already provides its custody services to more than 70 institutional clients however, it’s trading volume for the past month remained below $50 million while Galaxy's OTC desk handled more than $1 billion in trading volume in the first quarter.

Novogratz the CEO of Galaxy is a bitcoin proponent who remains a bitcoin bull and believes it to be the time for bitcoin.

In the backdrop of central banks printing money and debasement of fiat currencies, he has called for bitcoin to end the year higher.

His crypto investment firm reported a net income loss of $32.9 million for its 4Q19 financial returns.

In 2020, interest from asset managers in bitcoin as a hedge and store of value has spiked which is the result of the economic uncertainty caused by the COVID-19 pandemic, said Tim Plakas, Head of Sales at Galaxy Digital Trading, over-the-counter trading desk of New York-based Galaxy.

Just last month, hedge fund manager Paul Tudor Jones announced that he is holding bitcoin through futures that had demand on the CME Group surging. He said,

“We designed this partnership to service the uptick in demand our two firms have received from traditional asset managers seeking access to physical bitcoin.”

John Conneely, head of custody business development at Bakkt shared similar sentiments while talking with Bloomberg when he said this partnership “in response to demand we’ve been seeing in the last three months from institutions with a capital ‘I’.”

Back in April, Novogratz had said that real big investors who never thought about bitcoin have been asking him about the world’s leading digital currency.

Back in mid-March, Bitcoin price crashed over 40% but since then it has recovered 155%. Goldman Sachs however, said it doesn’t consider bitcoin an asset class and wouldn’t recommend it to its investors either.

“To be honest, different views exist in any market, that’s what makes the market,” Plakas told Bloomberg.

Galaxy would provide access to physical bitcoin which will be combined with the “high level of regulatory-compliant security,” provided by Bakkt to offer the same caliber of expertise in handling bitcoin as in any established traditional finance.

This announcement came amidst the news of the likes of Genesis (with Vo1t) and BitGo (with BitGo Prime, Lumina Tax, and Harbor) which made new acquisitions and added new capabilities to become crypto’s prime brokers.

“In the digital-asset space there’s a large push toward offering prime brokerage services that don’t exist in a very mature way,” Plakas said. And this is what they think about when going into partnerships or offerings when they “start to go down the prime brokerage-like route.”

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