Apex Fintech, a firm known for embedding stock trading into apps, is reportedly considering an acquisition of Bakkt (NYSE: BKKT), a cryptocurrency platform spun off from Intercontinental Exchange (ICE), according to recent report from Axios.
This potential deal comes two years after Bakkt acquired Apex’s crypto operations in 2022 for up to $200 million—a move that appeared to be prompted by intense regulatory scrutiny under the Biden administration.
Following the Axios report, Bakkt’s shares surged around 15% in morning trading, reaching $14.86, reflecting renewed market interest.
However, Bakkt’s journey since its inception reveals a journey of high (and unrealistic) hopes, unmet expectations, and ongoing strategic pivots, even as the web3 and digital assets landscape evolves under a far more crypto-friendly Trump administration.
Bakkt first launched in August 2018, founded by ICE with the goal of bridging traditional finance and digital assets.
Backed by companies like Microsoft, Starbucks, and Boston Consulting Group, it debuted with a goal to manage digital assets through a regulated platform, starting with Bitcoin futures trading in 2019.
The launch generated significant excitement, positioning Bakkt as a potential game-changer in institutional crypto adoption.
Investors and industry observers saw it as a bridge to mainstream finance, with its ICE pedigree and regulatory credentials—such as a New York BitLicense and trust charter—adding credibility.
At its peak post-SPAC merger in October 2021, Bakkt’s stock soared to $42, reflecting really high expectations.
Yet, Bakkt struggled to sustain that momentum. Despite its initial enthusiasm, it faced stiff competition from rivals offering far more robust products and services.
Companies like Coinbase and Binance, with broader coin offerings and seamless user experiences, decisively outpaced Bakkt, while fintechs like Robinhood capitalized on crypto trading’s retail boom.
Bakkt’s focus on Bitcoin futures and institutional clients didn’t translate into the widespread adoption anticipated, and its consumer-facing app—launched in 2021 after acquiring loyalty provider Bridge2 Solutions for $300 million—failed to gain considerable traction.
By March 2023, Bakkt shuttered this app, pivoting to a B2B2C model. Its 2023 acquisition of Apex Crypto aimed to bolster its fintech partnerships, but the platform has underperformed, contributing to a market cap drop to $175 million today.
Bakkt’s leadership, including CEO Gavin Michael, has experimented with various strategies to reverse this slide.
From consumer wallets to institutional custody and loyalty integrations, the executive team has sought to redefine Bakkt’s role.
The Apex acquisition was touted as a path to profitability, adding 5.8 million crypto-enabled accounts and clients like Webull and Public.com.
Yet, major US regulatory challenges—like the SEC’s 2023 crackdowns—forced Bakkt to delist 25 tokens, narrowing its product offerings to major coins like Bitcoin and Ethereum.
Financially, the company has struggled, posting a $45 million net loss in Q1 2023, and its payout for Apex is now expected to be less than half the original $200 million due to unmet targets.
Despite these challenges, hope remains.
The Trump administration’s pro-crypto stance—evidenced by pared-back SEC lawsuits and plans for a Strategic Bitcoin Reserve—has revitalized interest in digital assets. Institutional adoption is rising, and firms like Robinhood have seen crypto drive record revenues in 2024.
For Bakkt, an Apex buyback could offer significant stability, leveraging Apex’s infrastructure to reposition itself.
While it’s not yet a major player, the shifting regulatory and market developments suggest Bakkt—and the broader web3 and crypto sector—may still have a lot of room to grow in a sustainable manner. But this will also require a progressive approach towards the crypto industry – which we have already seen with the new Trump Administration.