Bakkt’s share price jumped over 162% on Monday after the Financial Times reported Donald Trump’s company was in advanced talks to acquire the crypto exchange.
Bakkt Holdings Inc (BKKT) closed up 162.46% at $29.71 on Nov. 18 and continued to climb 16.43% to $34.59 after the bell. Trump Media and Technology Group Corp (DJT) — which operates the social media platform Truth Social — also closed the day up 16.65% but lost around 3.5% after hours, according to Google Finance.
The Financial Times reported earlier on Nov. 18, citing two people with knowledge of the talks, that Trump Media — in which the United States president-elect holds a majority 53% stake — was in advanced talks for an all-share purchase of Bakkt, owned by Intercontinental Exchange.
BKKT surged on Monday, but it’s still down around 44% this year and 97% off its $1,063 peak from October 2021. Source: Google Finance
Crypto markets have surged since Trump’s election win earlier this month, with Bitcoin (BTC) up around 30%. Trump’s campaign promised to end regulatory hostility toward the crypto industry and promised a strategic Bitcoin stockpile, among other pro-crypto promises.
The deal, if successful, would mark another move by Trump into crypto. The incoming president has already licensed his image to multiple non-fungible token (NFT) collections and backed his family’s crypto project World Liberty Financial which he and his family are set to get a 75% cut of its fees.
A spokesperson for Intercontinental Exchange said it had no comment when asked questions about the reported deal. Trump Media and Bakkt did not immediately respond to requests for comment.
The valuation of the deal isn’t known, but Bakkt is now valued at over $400 million after its stock surge despite the exchange struggling to turn a profit. Its crypto custody business also never took off, which the firm said it would wind down and the FT reported that it wouldn’t be included in a deal with Trump Media.
Bakkt: Trump’s vehicle for strategic Bitcoin reserve?
Trump is expected to face headwinds in getting a Bitcoin reserve up and running, which would require congressional approval. Not every lawmaker on Capitol Hill would want the government to hold a historically speculative and volatile asset.
“Getting the bitcoin reserve established would be tricky without congressional approval, and that the easiest way around it would be via a SPV,” Izabella Kaminska, founder of the finance-focused news outlet The Blind Spot, wrote on X.
A special purpose vehicle (SPV), or special purpose entity (SPE), is a company created for the purpose of isolating risk from its parent company and undertaking limited operations, which in this case would be buying Bitcoin.
Kaminska speculated that Trump could use Trump Media “as the mechanism” to make a Bitcoin strategic reserve without congressional approval.
She explained, in theory, that Trump could order Trump Media to use Bakkt as an SPV to buy Bitcoin and set up a profit transfer agreement to donate the company’s capital gains to the US government.
But here’s where I’m kicking myself. With congressional approval not necessarily a shoo-in (218 seats might not be enough, given the number of conscientious objectors), I was thinking as early as July he could deploy DJT as the mechanism to make this happen quicker. Here’s what I… pic.twitter.com/U33SJKMvX5
— Izabella Kaminska (@izakaminska) November 18, 2024
“If people still think this is insane, I don’t think they appreciate just how much privatization is coming in the Trump admin,” Kaminska said.
Magazine: ‘Everything feels like it’s going to shit’ — Peter McCormack reveals new podcast
