Shares of Bakkt (NYSE:BKKT) continue to trade higher following a report by the FT that the crypto firm may be in talks to be acquired by Trump Media.
Bakkt, founded by ICE – the parent company of the NYSE, once had high hopes of becoming a top crypto exchange. According to its last quarterly report, “crypto enabled accounts” during Q2 now number 6.4 million, up slightly compared to the prior quarter. Assets under custody and traded volume declined from Q1 to Q2. The company continues to lose money.
Trump Media (Nasdaq: DJT) operates the social media platform Truth Social along with several other media brands.
During Q3, TMTG had an operating loss of $23.7 million and a net loss of $19.2 million, which includes $12.1 million in legal fees; TMTG earned $1.0 million in revenue for the third quarter in addition to $4.7 million in interest income.
So what is the play here?
President-elect Donald Trump has emerged as a top crypto supporter, in stark contrast to President Joe Biden, whose administration sought to destroy the digital asset sector. With Republicans controlling both the House and the Senate, along with the Executive branch, expectations are high that regulatory clarity for crypto will be forthcoming soon, fueling sector growth and innovation.
Bakkt stated the rumblings, saying they would not comment on marker rumors – in other words, probably yes.
If Bakkt is sold off to TMTG and becomes part of the Trump brand, the platform stands to gain from four years of affinity support.
Also this week, it has been reported that Coinbase founder and CEO Brian Armstrong had a meeting with the next President where Armstrong was said to have expressed his support of certain individuals in the running for the SEC. Currently led by Chairman Gary Gensler, the Commission has been one of the staunchest opponents of crypto, regulating by enforcement and falsely claiming crypto firms could register with the SEC. Once Gensler is gone, whomever takes over the SEC, it should be a big green light for crypto firms to operate in the US, in a compliant manner that includes investor protection rules.
Bakkt shares have almost tripled in value since reports of a possible acquisition leaked to the press.
