Trump Expands "Crypto Business Map," Plans to Acquire Crypto Exchange Bakkt

Original Article Title: "Trump Expands 'Crypto Business Map,' Plans to Acquire Crypto Exchange Bakkt"

Original Source: BitpushNews

As he prepares to take over the White House in January 2025, Trump continues to expand the new crypto landscape.

According to the Financial Times, Donald Trump's social media company, Trump Media & Technology Group, is in deep negotiations to acquire the cryptocurrency exchange platform Bakkt.

According to two sources familiar with the negotiation, Trump Media will acquire Bakkt in full, with Trump committing to retain his 53% stake, and the valuation and financial terms have not been disclosed yet.

The news has sent both companies' stock prices soaring.

Trump Media, majority-owned by Trump (NASDAQ stock code DJT), surged by double digits shortly after the report was published. The company operates the Truth Social app, closing up over 16%. Bakkt, which has experienced several halts due to volatility, closed with a surge of over 163%.

Mediocre Performance, Once on the Brink of Delisting

Bakkt, launched by Intercontinental Exchange (ICE), was founded in 2018, went public in October 2021, and primarily offers technical services to cryptocurrency investors. Before going public via 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 has struggled to turn a profit. Its latest quarterly report stated total revenue of $328.4 million, an operating loss of $27.4 million, a 48% reduction in losses compared to the same period last year.

Trump's relationship with Bakkt is noteworthy; Bakkt's former CEO Kelly Loeffler was a co-chair of Trump's inaugural committee.

Loeffler's husband is ICE's CEO Jeffrey Sprecher. In 2019, Georgia Governor Brian Kemp appointed Loeffler to fill the Senate seat vacated for health reasons by Senator Johnny Isakson. Loeffler then stepped down from her executive role at Bakkt. However, in the special Senate election runoff, Loeffler was defeated by Democratic Senator Raphael Warnock.

Bakkt had previously indicated that its cryptocurrency custody business could be shut down, a business that has been granted regulatory approval by New York authorities. Insiders familiar with the TMTG negotiations said that this business will not be included in the deal. In the three months ending September 30, the custody business operated at a loss of $27,000 with revenue of $328,000.

Due to the low stock price, Bakkt faced the risk of being delisted from the New York Stock Exchange until a 1 for 25 reverse stock split was carried out in April. Last week, its stock price rose by 15%.

Expanded Business Map, Stock Performance Greater Than Fundamentals?

The Trump family's foray into the cryptocurrency market is accelerating. Its cryptocurrency project World Liberty Financial launched in September, along with several commitments made during the campaign related to digital assets (such as establishing a Bitcoin reserve, creating a mining-friendly environment, and changing the SEC chairman), all demonstrate Trump's strong interest in the cryptocurrency industry.

This interest is directly reflected in the market. With Trump's victory, retail investors' expectations for the Republican Party, as well as optimistic expectations for cryptocurrency-friendly policies from the Trump administration, have led to significant fluctuations in the stock price of TMTG, the parent company of Trump's social media platform Truth Social, with fluctuations of 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, yet its equity valuation exceeds $7 billion.

Truth Social's user base is also relatively small. According to Similarweb data, this month Truth Social's website has an average daily traffic of 646,000, while Musk's X platform has a daily traffic of 155 million.

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