Bakkt Explained: The Crypto Platform Trump Allegedly Wants To Buy

The crypto community has been buzzing with the latest rumors that president-elect Donald Trump is potentially planning to buy Bakkt Holdings, the b2b digital assets trading platform. Following the rumors, Bakkt’s stock price jumped over 150% on Tuesday 19 November.

Bakkt initially offered services to both businesses and individual users. However, in February 2023, Bakkt announced the discontinuation of its consumer-facing app to focus exclusively on providing b2b solutions.

If true, this would be a potentially significant development for the crypto community, as Trump would become the first US president to hold majority stakes in a crypto platform.

So, what is Bakkt? And why is Trump potentially willing to buy out this platform? Let’s explore.

What is Bakkt?

Bakkt Holdings, Inc., established in 2018, is a publicly traded digital asset platform headquartered in Alpharetta, Georgia, and New York City. Founded by Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, Bakkt offers software-as-a-service (SaaS) and application programming interface (API) solutions for cryptocurrency and loyalty programs.

Its services include institutional-grade custody, trading, and onramp capabilities, enabling businesses to integrate digital assets into their operations.

In October 2021, Bakkt became a publicly listed company on the New York Stock Exchange under the ticker symbol BKKT. In April 2023, it expanded its offerings by acquiring Apex Crypto, a Chicago-based integrated crypto trading platform.

Bakkt’s platform provides businesses with tools to manage and trade digital assets securely, facilitating the integration of cryptocurrencies and loyalty points into consumer-facing applications. Its regulated approach and institutional-grade infrastructure position it as a significant player in the digital asset industry.

Rumors about Trump’s acquisition

Recent reports indicate that Trump Media & Technology Group (TMTG), the parent company of Truth Social, is in advanced discussions to acquire Bakkt, a cryptocurrency trading platform founded by Intercontinental Exchange (ICE). The proposed transaction is structured as an all-stock deal, with Bakkt’s market capitalization estimated at approximately $150million.

This potential acquisition aligns with president-elect Donald Trump’s increasing involvement in the cryptocurrency sector. In September, he launched World Liberty Financial, a decentralized finance platform. Additionally, Trump recently met with Coinbase CEO Brian Armstrong, signaling a commitment to expanding his presence in the digital asset space.

Market reactions to the news have been significant. Bakkt’s shares surged by 162% following the announcement, while TMTG’s stock increased by 16.7%. This volatility reflects investor interest and speculation regarding the potential impact of the acquisition on both companies.

Bakkt, established in 2018, has faced challenges in achieving profitability. The company has considered winding down its crypto custody business and was at risk of delisting from the New York Stock Exchange before implementing a reverse stock split earlier this year. Despite these hurdles, Bakkt has continued to develop its trading platform for institutional investors.

The acquisition discussions exclude Bakkt’s crypto custody business, focusing instead on its trading infrastructure. This strategic move could enhance TMTG’s capabilities in the crypto market, aligning with Trump’s campaign promises to position the United States as a leading hub for digital assets.

As of now, neither TMTG nor ICE have provided official comments on the potential acquisition. Bakkt has also related an official statement saying that it won’t comment on ‘market rumors or speculation’.

The outcome of these discussions remains uncertain, but the developments underscore a significant shift in TMTG’s strategic direction toward embracing cryptocurrency technologies.

Why would Trump want to buy Bakkt?

TMTG interest in acquiring Bakkt appears to align with a broader strategy to establish a significant presence in the digital asset space. Here are potential reasons and logical explanations for this move:

1. Expansion into digital finance

Bakkt offers an established platform for cryptocurrency trading and digital asset management. By acquiring Bakkt, TMTG could immediately gain access to infrastructure that supports institutional-grade custody, trading, and other crypto-related services. This move could position TMTG as a competitive player in the rapidly growing digital finance sector.

2. Diversification of business portfolio

TMTG, primarily known for its social media platform Truth Social, might be looking to diversify its offerings. The integration of digital asset services, including crypto trading and loyalty programs, would allow TMTG to tap into new revenue streams and attract a different audience base.

3. Leveraging regulatory momentum

The United States has been exploring clearer regulations for the cryptocurrency market. An acquisition of Bakkt, which operates under a regulated framework, could provide TMTG with a compliant and secure entry into this space. This aligns with Trump’s previous indications of supporting cryptocurrency innovation under proper regulatory oversight.

4. Institutional and retail market capture

Bakkt’s platform caters to both institutional and retail markets. TMTG could leverage this dual-market approach to drive adoption of its digital financial products, potentially integrating them with existing social media and technology offerings for an improved user experience.

5. Enhancing brand influence in tech and finance

Acquiring Bakkt could strengthen Trump’s influence in the technology and financial sectors. By controlling a prominent digital asset platform, TMTG could shape industry narratives and trends, positioning itself as a pioneer in the intersection of media, technology, and finance.

6. Response to market trends

The cryptocurrency sector, despite market fluctuations, continues to attract institutional and retail interest. Bakkt’s infrastructure, coupled with TMTG’s brand recognition, could capitalize on this sustained interest. The surge in Bakkt’s stock following acquisition rumors indicates market confidence in such a strategic move.

7. Cost-effective market entry

Rather than building a digital asset platform from scratch, TMTG could acquire Bakkt to fast-track its entry into the crypto sector. This approach minimizes time and development costs while providing an operationally ready platform.

As of 19 November 2024, there is no publicly available information indicating that Donald Trump holds a stake in Bakkt Holdings, Inc. These discussions only indicate a potential future acquisition and do not imply any current ownership stake by Donald Trump or his associated entities in Bakkt.