As he prepares to take office in the White House around January 20, 2025, Trump continues to expand into new areas of crypto.
, Donald Trump's social media company Trump Media & Technology Group is in advanced negotiations to acquire cryptocurrency trading platform Bakkt.
The company, which operates the Truth Social app, surged double digits minutes after publication. It closed up more than 16%. Bakkt, which experienced several circuit breakers due to excessive volatility, closed up more than 163%.
The performance was mediocre and it was once on the verge of delisting.
Bakkt was launched by the Intercontinental Exchange (ICE), founded in 2018, and listed in October 2021. Its main business is to provide technical services to cryptocurrency investors. Before going public through SPAC, Bakkt had raised hundreds of millions of dollars from investors such as Boston Consulting Group, Galaxy Digital, ICE, and Microsoft's M12 Venture Fund, but it has been difficult to make a profit. Its latest fiscal quarter report stated that total revenue was US$328.4 million and operating losses were US$27.4 million, a 48% reduction from the losses in the same period last year.
Trump has a special relationship with Bakkt. Kelly Loeffler, former CEO of Bakkt, is the co-chair of Trump’s inaugural committee.
Loeffler's husband is Jeffrey Sprecher, CEO of Intercontinental Exchange. In 2019, Georgia Governor Brian Kemp appointed Loeffler to replace Senator Johnny Isakson, who resigned for health reasons, in the Senate. Loeffler subsequently resigned from his position as a Bakkt executive. However, in the runoff for the special election for the Senate seat, Loeffler was defeated by Democratic Senator Raphael Warnock.
Bakkt has previously said its cryptocurrency custody business, which has regulatory approval from New York authorities, may be shut down. People familiar with TMTG’s negotiations said the business would not be included in the deal. The custody business had an operating loss of $27,000 on revenue of $328,000 in the three months ended Sept. 30.
Bakkt had faced delisting from the New York Stock Exchange due to its depressed share price until it conducted a 25-for-1 reverse stock split in April. Its shares rose 15% last week.
The expanding crypto landscape, with stock prices outperforming fundamentals
The Trump family is accelerating its pace in the cryptocurrency market. Its cryptocurrency project World Liberty Financial, launched in September, and its multiple promises related to digital assets during the campaign (such as establishing a Bitcoin reserve, creating a mining-friendly environment, and replacing the SEC chairman) all show Trump's strong interest in the cryptocurrency industry.
This interest is directly reflected in the market. With Trump's victory in the election, retail investors' expectations for the Republican Party and optimistic expectations that the Trump administration may introduce policies that are favorable to cryptocurrencies have caused the stock price of TMTG, the parent company of Trump's social media platform Truth Social, to fluctuate sharply, rising and falling by billions of dollars on the eve of the election. TMTG has also become one of the most actively traded US stocks. However, TMTG's revenue this year is only $2.6 million, with a net loss of $363 million, but its equity valuation exceeds $7 billion.
Truth Social also has a relatively small user base, with an average of 646,000 daily visits to the site this month, compared with 155 million daily visits to Musk's X platform, according to data from Similarweb.
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