Starbucks going all-in on cryptocurrency is “the biggest news of the year for bitcoin” — because it paves the way for a bitcoin ETF, according to BK Capital Management founder Brian Kelly.
Starbucks, the Intercontinental Exchange (ICE), Microsoft and BCG, among others, announced on Friday they are working to launch a new company called Bakkt. Along with enabling consumers to use bitcoin and other cryptocurrencies at Starbucks, Bakkt will leverage Microsoft cloud to create an open and regulated, digital asset ecosystem, ICE announced on Friday.
“They’ll now have a U.S.-regulated exchange and they have a licensed warehouse, which is how commodities are stored and that’s going to make it a lot easier for an ETF to come through,” Kelly, a bitcoin enthusiast, said on CNBC’s “Fast Money.”
Starbucks and a major exchange taking cryptocurrency seriously could help bitcoin break through as a mainstream global currency. It may also help boost cryptocurrency prices, which have struggled to find footing since the end of 2017.
“This is huge news,” said Kelly, who also manages blockchain-focused BKCM Digital Asset Fund.
Kelly said this development strikes at the heart of many cryptocurrency critics who argue cryptocurrencies are impractical.
Starbucks accepting cryptocurrencies makes them much more mainstream, plus it means users can spend their digital fortunes almost anywhere.
And ICE’s participation massively increases the chances of bitcoin exchange-traded funds (ETFs), or baskets of related assets that trade on stock exchanges.
“They’re talking about getting this into your 401(K). They’re talking about in your…. Fidelity or TD Ameritrade account, you’re going to be able to buy a bitcoin ETF, a bitcoin mutual fund. It expands the universe,” Kelly said.
Despite his optimism, bitcoin prices didn’t react to the news as positively as he expected.
“My conclusion is the crypto market is completely missing this. Perhaps the market in general is missing this. This is very, very big news,” he said.
Bitcoin last traded around $7,000, according to Coinbase data. Bitcoin briefly topped $19,000 in December, before losing more than half its value.