Crypto Marketplace Bakkt Considers Potential Breakup Or Sale As Market Recovers

Bakkt Holdings, the digital-asset marketplace launched by the parent company of the New York Stock Exchange (NYSE), is reportedly considering a potential sale in light of increased takeover activity within the crypto industry. 

Bakkt Evaluates Strategic Alternatives

According to Bloomberg, sources familiar with the matter have revealed that Bakkt has engaged a financial advisor to explore various strategic options, including a potential breakup. However, no final decision has been made. 

Intercontinental Exchange (ICE), the owner of major futures markets and the NYSE, launched Bakkt amid significant anticipation. The venture was announced in collaboration with Starbucks and Microsoft, garnering substantial attention. 

Kelly Loeffler, Bakkt’s founding CEO, later served as a US Senator from Georgia for one year. Earlier this year, Bakkt faced the risk of delisting from the NYSE after disclosing potential challenges in continuing as a going concern.

Bakkt, which provides several services, including trading and custody, enters the market during a period of consolidation within the digital asset sector. 

However, crypto prices have surged to near-record highs, prompting some firms to consider expansion while others continue recovering from the industry-wide downturn two years ago. 

Potential Breakup Considered

Bakkt went public in 2021 through a merger with a blank-check vehicle. In the first quarter of this year, the company reported a loss of $21 million on $855 million in revenue. On Friday, Bakkt unveiled a partnership with Crossover Markets to develop a crypto electronic communication network (ECN), further expanding its offerings.

Bakkt holds a coveted BitLicense from the New York State Department of Financial Services, a regulatory license required to operate in the state. 

Following the news, the company’s shares surged 15% to reach $22.33 on Friday, a 27% increase for the week. The company’s market value stands at approximately $300 million. However, Bakkt’s stock has declined around 30% over the past year.

Overall, as the digital asset marketplace firm explores potential strategic options, including a potential sale, in response to heightened activity in the crypto industry, it faces a crucial crossroads. 

Bakkt’s suite of services, BitLicense approval, and recent partnership announcements position it as a significant player in the market. Nonetheless, industry participants will closely monitor the company’s future trajectory and determination to remain independent or seek a buyer.

As of the latest update, the total market capitalization of the cryptocurrency market has dipped below the $2.5 trillion mark. This decline has been primarily driven by the decrease in the price of Bitcoin (BTC), the largest cryptocurrency by market capitalization. Bitcoin has experienced a drop from  $71,000 and is currently valued at approximately $69,000.

Featured image from Shutterstock, chart from TradingView.com