Bakkt News: A High-Stakes Gamble in Crypto and Finance

Bakkt, a subsidiary of the Intercontinental Exchange (ICE), launched its first product in September 2019, a physically-settled Bitcoin futures contract.

The ICE had been exploring the idea of creating a cryptocurrency futures market for years, and Bakkt was the result of this effort.

Bakkt's launch was a significant event in the crypto space, as it marked the first time a major exchange had attempted to bring cryptocurrency derivatives to the mainstream.

The company's founders, including ICE's CEO Jeff Sprecher, were optimistic about the potential for Bakkt to disrupt the traditional financial markets.

Bakkt Holdings, Inc. (NYSE: BKKT) has been making waves in the cryptocurrency market with its innovative services and partnerships.

The company has partnered with several banks, including Hanover Community Bank and Manasquan Bank, to offer cryptocurrency services to their customers via their mobile apps.

Bakkt's crypto connect solution is expected to launch in Q2 2022, pending integration with the bank's systems, and will allow customers to buy, sell, and hold cryptocurrencies like Bitcoin and Ethereum.

Bakkt's platform aims to boost digital commerce and provide flexible options for users to manage their digital assets, with nearly half of U.S. consumers reportedly investing in cryptocurrencies recently.

The company has also partnered with Nexo to provide cryptocurrency custody services through the Bakkt Warehouse, which is regulated by the New York Department of Financial Services.

Bakkt's platform now offers the ability to buy, sell, and send Ethereum (ETH), in addition to its existing Bitcoin services, allowing access to two major cryptocurrencies that represent over half of the total market value.

Bakkt's market capitalization hovers around $150 million, which is a relatively small fraction compared to TMTG's $6 billion valuation.

TMTG's valuation is largely driven by fervent retail investor support following Donald Trump's re-election, which is a significant factor in their decision to pursue the acquisition.

The acquisition could integrate Bakkt's trading services into Trump's expanding media empire, potentially positioning TMTG as a major player in the digital asset ecosystem.

Bakkt's crypto custody business, which holds assets like bitcoin and ether, will be excluded from the deal, as TMTG focuses on trading and broader market engagement rather than secure storage solutions.

This decision makes sense, given that Bakkt's infrastructure includes both warm and cold storage solutions, ensuring a robust safety framework for users, as seen in their partnership with Nexo.

The deal is a high-stakes gamble, with Bakkt admitting it "may not be able to continue as a going concern" in its quarterly results, citing possible delisting from the NYSE if conditions deteriorate.

Bakkt reported a 38% increase in net revenue to $9.1 million in Q3 2021 compared to $6.6 million in Q3 2020.

The surge in revenue was driven by heightened customer activity, but operating expenses also rose significantly. Operating expenses surged 60% to $39 million in Q3 2021.

Bakkt's net loss increased to $28.8 million in Q3 2021, up from $18 million a year prior. This was largely due to growth investments and merger costs.

Bakkt's addressable market now exceeds 100 million consumers. This is supported by strategic partnerships with major companies like Finastra, Mastercard, and Fiserv.

Fiserv and Bakkt have partnered to integrate Bakkt's capabilities into Fiserv's Carat ecosystem, enabling businesses to utilize digital assets for B2B and B2C transactions.

This collaboration aims to enhance consumer experiences by facilitating crypto transactions and integrating digital assets into merchant offerings.

Mastercard and Bakkt have partnered to enhance cryptocurrency adoption among U.S. merchants, banks, and fintechs, enabling consumers to buy, sell, and hold cryptocurrencies.

Nearly half of U.S. consumers surveyed expressed interest in cryptocurrency, indicating growing demand.

Manasquan Bank has selected Bakkt to offer retail clients access to cryptocurrency, enabling them to buy, sell, and hold cryptocurrencies through the bank's mobile app.

The bank's launch is anticipated in Q2 2022, pending the adoption by the bank's core financial service provider.

Bakkt is expanding its cryptocurrency offering to include Ethereum, allowing users to buy, sell, and send the digital asset.

This new feature complements its existing Bitcoin services, providing access to two major cryptocurrencies representing over half of the total market value.

Fiserv, a global leader in payments technology, has partnered with Bakkt to integrate Bakkt's capabilities into Fiserv's Carat ecosystem. This collaboration enables businesses to utilize digital assets for B2B and B2C transactions.

The partnership aims to enhance consumer experiences by facilitating crypto transactions and integrating digital assets into merchant offerings. Fiserv's financial institution clients will also have access to Bakkt's technology for managing crypto assets.

Bakkt's digital asset platform will allow businesses to buy, sell, and hold cryptocurrencies, providing a seamless experience for users. This integration is expected to boost digital commerce and provide flexible options for users to manage their digital assets.

Fiserv's partnership with Bakkt reflects a growing trend of integrating cryptocurrency into traditional banking services. This collaboration will enable businesses to stay competitive in the digital economy and provide innovative solutions for their customers.

Here's a brief overview of the partnership's key features:

One company, Trump Media, has a market cap of $7 billion despite minimal revenue of $2.6 million and a $363 million net loss. This is a stark contrast to the typical expectations of business performance.

Bakkt, on the other hand, has a more balanced approach with $328.4 million in revenue. Its operating loss of $27.4 million represents a 48% improvement from last year.

The market cap of Trump Media is a staggering $7 billion, which is hard to justify with its current financial performance.