In a move that has sent shockwaves through the cryptocurrency and financial markets, Trump Media, led by President-elect Donald Trump, is reportedly in advanced negotiations to acquire Bakkt, a cryptocurrency trading firm. The Financial Times, citing insiders familiar with the talks, broke the story on Monday, causing a flurry of activity on Wall Street and the crypto markets.
Market Reactions: Soaring Shares Amid Volatility
The news catapulted the stocks of both Trump Media and Bakkt. Trump Media, trading on the Nasdaq under the ticker symbol DJT, surged over 16% by the close of the day. Bakkt experienced even greater turbulence, with its stock skyrocketing by more than 162%. Trading halts were triggered multiple times due to volatility.
Kelly Loeffler, a former CEO of Bakkt and a close associate of Trump as co-chair of his inauguration committee, adds a layer of intrigue to the potential deal. Loeffler’s history with Bakkt and her ties to Intercontinental Exchange, the parent company of Bakkt and owner of the New York Stock Exchange, highlight a deep interconnection between finance, politics, and cryptocurrency.
A Strategic Crypto Expansion
The reported acquisition aligns with Trump’s expanding interest in cryptocurrency. This isn’t his first foray into the sector. Weeks before the 2024 presidential election, Trump announced a partnership with World Liberty Financial (WLF), launching a new token tied to the venture. The deal promised Trump and his family 75% of the net coin revenue while shielding them from liability.
While Trump Media reported a $363 million net loss on revenues of $2.6 million this year, the company’s market cap remains impressive, exceeding $7 billion. With nearly $673 million in cash reserves, the acquisition of Bakkt could be a strategic move to solidify Trump’s footprint in the crypto world.
Bakkt’s Tumultuous Journey
Founded in 2018, Bakkt has aimed to provide tech solutions for crypto investors. Despite a recent revenue report of $328.4 million for its latest fiscal quarter, the company continues to face significant challenges, including a $27.4 million operating loss. Earlier this year, Bakkt navigated a reverse stock split to avoid delisting by the New York Stock Exchange due to its stock price dipping below the $1 threshold.
Bakkt’s future remains uncertain, as flagged in its latest quarterly report. While the management claims sufficient capital to sustain operations for the next 12 months, the report acknowledged the precarious nature of its financial stability.
“If we cannot continue as a viable entity, our stockholders will likely lose most or all of their investment in us,” the company admitted.
Implications for Crypto and Beyond
The potential Trump Media-Bakkt deal underscores the growing intersection of politics and cryptocurrency. If finalized, this acquisition could mark a significant shift in Trump’s business strategy as he prepares to assume the presidency in January 2025. It also reflects the broader trend of traditional financial and political institutions increasingly engaging with the decentralized world of blockchain and cryptocurrency.
This story will continue to develop as negotiations progress, and its outcome could have far-reaching implications for both the crypto industry and Trump’s legacy as a businessman-turned-politician.