Bakkt business faces uncertainty, seeks $150M in securities sale

abdelaziz Fathi

Digital asset firm Bakkt, which is owned by Intercontinental Exchange (ICE), is facing cash shortage and other financial difficulties, signaling it might struggle to continue operations.

Amidst its financial woes, Bakkt plans to raise up to $150 million by selling securities to alleviate its ongoing cash flow problems.

The cryptocurrency platform was introduced by the owner of the New York Stock Exchange (NYSE) in 2018 to facilitate Bitcoin transactions for everyday purchases, such as buying coffee from Starbucks. Kelly Loeffler, who later served as a U.S. Senator, was appointed as Bakkt’s first CEO.

Despite its ambitious goals and the backing of a major financial institution, the platform has encountered challenges in realizing its vision. In 2021, Bakkt launched a digital wallet, which was subsequently discontinued in 2022, as the company shifted its focus towards crypto custody and trading services.

“We might not be able to continue as a going concern, We do not believe that our cash and restricted cash are sufficient to fund our operations for the 12 months following the date of” the filing reads.

The broader initiative to use Bitcoin for payments has largely fallen short of expectations, although projects like the Lightning Network seek to upgrade transaction efficiency through layer-2 blockchain solutions.

On February 7, Bakkt filed an amendment to its quarterly report with the U.S. Securities and Exchange Commission (SEC), explicitly stating concerns about its ability to continue as a going concern over the next year.

Bakkt’s inability to generate sustainable operating profits or adequate cash flows has led to this critical juncture. The company now looks towards raising additional capital through the issuance of registered securities in the public markets.

In an amended Form S-3 filing, Bakkt detailed the planned securities sale, which it hopes to provide the necessary funding for working capital and other corporate purposes. However, the company has been vague about the specific use of the proceeds from this sale, maintaining broad discretion over their allocation.

“We cannot conclude it is probable we will be able to increase revenues substantially beyond levels that we have attained in the past in order to generate sustainable operating profit and sufficient cash flows to continue doing business without raising additional capital in the near future,” it added.

In 2023, Bakkt cut support for 25 out of the 36 crypto tokens that were listed on its recently acquired trading platform, Apex Crypto. At the time, Bakkt didn’t provide a reason for the delisting, but the company was seeking to focus on a smaller number of more popular tokens. It also can be attributed to recent regulations and changes in the crypto industry.

Bakkt also stated that the acquisition of Apex Crypto aligns with its strategic focus on the business-to-business (B2B) market for crypto services. As part of this focus, Bakkt shut down its own retail cryptocurrency exchange.


  • Read this next

    Retail FX

    Lark Funding reopens to US traders, MyFundedFX picks cTrader

    Canada-based prop trading firm Lark Funding announced it will once again welcome clients from the United States.

    Institutional FX

    Cboe FX volume falls to lowest level since summer

    Cboe’s institutional spot FX platform, known as Cboe Spot, today announced its trading volume for the month ending February 2024, which took a step back after a strong rebound in December.

    Retail FX

    ThinkMarkets secures lucrative DFSA license in Dubai

    Melbourne-based broker ThinkMarkets has secured a license from the Dubai Financial Services Authority (DFSA) after it has already incorporated its new subsidiary in the Dubai International Financial Center (DIFC).

    Digital Assets

    New Horizen Lays Out Its Vision Of A Modular, Proof Verification Layer For Web3 Networks

    Horizen is forging a new path for the future of blockchain with its New Horizen initiative, which is building a modular Proof Verification layer that’s dedicated to verifying cryptographic proofs for any settlement layer, beginning with Ethereum. 

    Digital Assets

    Karma3 Labs Raises a $4.5M Seed Round Led By Galaxy and IDEO CoLab to Build OpenRank, a Decentralized Reputation Protocol

    Using OpenRank, developers and web3 companies can build consumer apps where people can discover, use, fund, read, or buy something on-chain without worrying about getting spammed or scammed.

    Digital Assets

    Worldcoin down as Elon Musk sues OpenAI CEO Sam Altman

    Worldcoin’s (WLD) token dropped following news of a lawsuit against related company OpenAI. The lawsuit was filed by Elon Musk and accused OpenAI and CEO Sam Altman of breach of contract.

    Institutional FX

    Exegy’s Liquidity Lamp adds intraday data to outperform S&P 500 by 31.8%

    Exegy has incorporated intraday signals into its AI-powered iceberg order detection tool, Liquidity Lamp. By adding intraday data to a baseline mean reversion strategy, Exegy’s model outperformed the baseline by 10.5% and the S&P 500 (SPY) by 31.8%, respectively in the out-of-sample testing.

    Industry News

    Think Elon Musk backed your crypto exchange? ASIC’s latest reveal may shock you

    In an absolutely shocking turn of events that nobody could have possibly seen coming, the Australian Securities and Investments Commission (ASIC) has bravely stepped forward to reveal that, yes, those videos of Elon Musk passionately endorsing a cryptocurrency exchange are as fake as a three-dollar bill.

    Fundamental Analysis

    Global FX Market Summary: EUR, USD March 1st, 2024

    The ISM’s February Manufacturing PMI is expected to show a slight increase, but remain below the expansionary threshold, while inflationary pressures persist and a Fed rate cut in June is still possible.