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Bakkt explores potential sale or breakup amid surge in crypto M&A activity

Jun. 7, 2024

Bakkt reports $348 million in Q2 revenue as it contemplates corporate restructuring.

companies buying up or merging with crypto firms

Bakkt is considering strategic options, including a potential sale or breakup, according to an initial report from Bloomberg citing persons familiar with the matter. The move comes amid a surge in takeover activity within the cryptocurrency sector.

The sources, who asked to remain anonymous due to the confidential nature of the matter, revealed that Bakkt has been working with a financial advisor to evaluate its options. However, no final decision has been made, and the company may choose to remain independent.

Bakkt was launched in 2018 by Intercontinental Exchange, which owns several major futures markets and the NYSE. The venture’s founding CEO, Kelly Loeffler, later served as a US Senator from Georgia for a year. Earlier this year, Bakkt faced the risk of being delisted from the NYSE after disclosing that it might not be able to continue as a going concern.

Increased crypto merger and acquisition activities

The potential sale of Bakkt comes as consolidation activity heats up in the digital-asset sector, with crypto prices nearing record highs. While some companies are considering expansion, others are still recovering from the industry-wide meltdown that occurred two years ago. Recent examples of consolidation include Robinhood’s acquisition of European crypto exchange Bitstamp and Riot Platforms Inc.’s proposed takeover of its rival Bitfarms.

Bakkt, which went public through a merger with a blank-check vehicle in 2021, reported a first-quarter loss of $21 million on $855 million in revenue. The company also recently announced a partnership with Crossover Markets to develop a crypto electronic communication network (ECN).

One of Bakkt’s valuable assets is its BitLicense from the New York State Department of Financial Services, which allows it to operate in the state. Other major industry participants with this license include crypto exchange Coinbase, stablecoin issuer Circle, and Jack Dorsey’s digital payment firm Square.

Following the news of the potential sale, Bakkt shares rose 15% to $22.33 on Friday, bringing the company’s market value to around $300 million. Despite this recent increase, the stock has fallen approximately 30% over the past year.

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