- TMTG’s potential Bakkt acquisition shows its ambition to expand beyond social media into the booming cryptocurrency sector.
- Bakkt’s struggles, including delisting threats, could be reversed as it pivots to institutional trading under TMTG’s leadership.
- Trump’s election boosted Bitcoin prices, with Bakkt shares surging 162%, highlighting optimism for crypto-friendly regulations.
Bakkt, a bitcoin trading platform, is being negotiated for an all-share purchase by Trump Media and Technology Group (TMTG), Donald Trump’s media company. The agreement might represent a major growth for TMTG, the company that runs the social media network Truth Social.
As of Monday, Bakkt’s market capitalization was $150 million, although its exact valuation is still unknown. TMTG’s goal to expand beyond social media and enter the expanding cryptocurrency business is in line with this acquisition.
Bakkt’s Struggles and Potential Shift
Intercontinental Exchange owns Bakkt, which has had trouble turning a profit since its founding. Bakkt, whose low share price earlier this year threatened to delist, nonetheless has a 55% economic stake held by ICE.
A reverse stock split in April prevented the delisting, but its crypto custody business, which holds a regulatory license, has failed to gain traction. The custody segment, making operating losses of $27,000 on $328,000 in revenue, is expected to be excluded from the deal.
Despite these challenges, Bakkt plans to focus on building a trading platform for institutional investors. This pivot could position the company for improved performance under TMTG’s leadership. Additionally, Bakkt’s association with prominent figures such as Jeff Sprecher and former Senator Kelly Loeffler highlights its significant potential in cryptocurrency.
TMTG’s Crypto Ambitions and Market Impact
TMTG, valued at $6 billion despite reporting only $2.6 million in revenue this year, aims to leverage its equity for strategic acquisitions. Bakkt’s integration could deepen Trump’s involvement in the cryptocurrency market. Notably, he has also promoted a new crypto venture, World Liberty Financial, which could yield significant fees.
Moreover, Trump’s election victory has boosted crypto markets, with Bitcoin prices surging over 30% on speculation of favorable industry regulations. This market optimism mirrors the 162% spike in Bakkt shares following news of the acquisition talks. TMTG shares also rose by 16.7%, reflecting investor confidence in this move.
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