Donald Trump, the elected president of the United States, is taking concrete steps to support Bitcoin, as his social media group Trump Media & Technology Group Corp. (TMTG) is negotiating to acquire the cryptocurrency exchange Bakkt. Retail investors in the U.S. are trying to profit from the often volatile trading trends, causing TMTG's stock price to surge over 15% on Monday (November 19), while Bakkt's stock price rose over 160%.
The UK Financial Times reported that TMTG, under Trump, is in deep negotiations to acquire the cryptocurrency exchange Bakkt, which is owned by Intercontinental Exchange, to expand its business beyond online dialogue.
According to two people familiar with the negotiations, TMTG is about to acquire Bakkt entirely. Trump has promised to retain a 53% stake in the group. The valuation being discussed by both parties is unclear, but Bakkt's market value was slightly above $150 million on Monday.
Since Trump's election, TMTG, which operates Truth Social, has become one of the most actively traded stocks in the United States, with retail investors attempting to profit from its often volatile trading trends. Although TMTG's revenue this year was only $2.6 million, its equity valuation is as high as $6 billion.
Following the negotiation news from the British media, Bakkt's stock price soared by 162%, while TMTG's stock price rose by over 16%.
A successfully completed agreement will further deepen Trump's foray into the cryptocurrency market, having previously started promoting a new cryptocurrency joint venture established by long-time business partner World Liberty Financial (WLFI) and earned significant fees from it. After he won the election, the cryptocurrency market surged, with Bitcoin rising over 30%, as people speculated that his administration would enact favorable legislation for the industry.
Since its launch, Bakkt has struggled with profitability; it was created by the ICE Intercontinental Exchange, which still holds a 55% economic interest in it.
The first CEO of Bakkt was Kelly Loeffler, who previously served as the head of marketing at ICE and was a Republican senator from Georgia during Trump's first presidency. She co-chaired the committee that organized Trump's inauguration in January. Her husband is Jeff Sprecher, the founder, chairman, and CEO of ICE.
Bakkt previously stated that its cryptocurrency custody business, regulated by New York authorities, may be shut down. Sources familiar with TMTG's negotiations indicated that this business would not be included in the deal.
The establishment of this cryptocurrency business was intended to hold digital assets like Bitcoin and Ethereum on behalf of clients but failed to develop, with revenue of $328,000 in the three months ending September 30, but an operating loss of $27,000. Bakkt plans to create a trading platform for institutional investors.
Due to a slump in stock prices, Bakkt once faced the risk of delisting from the NYSE until the implementation of a 1:25 reverse stock split in April. Last week, its stock price rose by 15%.
Truth Social's reach remains limited; according to Similarweb, its website averaged 646,000 visitors per day this month, while Musk's Twitter (now rebranded as X) platform had 155 million daily visits.
Even so, Bloomberg calculates that the shares of the incoming president now account for more than half of his $5.7 billion fortune.
