Bakkt’s share price jumped over 162% on Monday after the Financial Times reported Donald Trump’s media company was in advanced talks to acquire the crypto exchange.
Bakkt Holdings closed up 162.5% at $29.71 on Nov. 18 and continued to climb 16.4% to $34.59 after the bell. Trump Media and Technology Group — which operates the social media platform Truth Social — closed the day up 16.6%, but lost about 3.5% after hours, according to Google Finance.
The Financial Times reported earlier on Nov. 18, citing two people with knowledge of the talks, that Trump Media — in which the United States president-elect holds a majority 53% stake — was in advanced talks for an all-share purchase of Bakkt, owned by Intercontinental Exchange.
BKKT surged on Monday, but it’s still down around 44% this year and 97% off its $1,063 peak from October 2021. Source: Google Finance
Crypto markets have surged since Trump’s election win earlier this month, with Bitcoin (BTC) up about 30%. Trump’s campaign promised to end regulatory hostility toward the crypto industry and to amass a strategic Bitcoin stockpile, among other pro-crypto pledges.
If successful, the deal would represent another step by Trump into the cryptocurrency space. The incoming president has already licensed his image to several non-fungible tokens (NFT) collections and has supported his family’s crypto venture, World Liberty Financial. He and his family are poised to receive 75% of the project’s fees.
A spokesperson for Intercontinental Exchange said it had no comment when asked about the reported deal. Trump Media and Bakkt did not immediately respond to requests for comment.
The valuation of the reported deal isn’t known, but Bakkt is now valued at over $400 million after its stock surge, despite the exchange struggling to turn a profit.
The firm had said it would wind down its crypto-custody business, which never took off. The FT reported that it wouldn’t be included in a deal with Trump Media.
Bakkt: Trump’s vehicle for strategic Bitcoin reserve?
Trump is expected to face headwinds in getting a Bitcoin reserve up and running, as it would require congressional approval.
“Getting the bitcoin reserve established would be tricky without congressional approval, and that the easiest way around it would be via a SPV,” Izabella Kaminska, founder of the finance-focused news outlet The Blind Spot, wrote on X.
A special purpose vehicle (SPV), or special purpose entity (SPE), is a company created to isolate risk from its parent company and undertake limited operations, which in this case could be buying Bitcoin.
Related: Coinbase CEO to meet with Trump to discuss personnel appointments — WSJ
Kaminska speculated that Trump could use Trump Media “as the mechanism” to make a Bitcoin strategic reserve without congressional approval.
She explained, in theory, that Trump could order Trump Media to use Bakkt as an SPV to buy Bitcoin and set up a profit transfer agreement to donate the company’s capital gains to the US government.
“If people still think this is insane, I don’t think they appreciate just how much privatization is coming in the Trump admin,” Kaminska said.
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