KEY POINTS
- The parties are reportedly in advanced stages for an all-stock deal
- Bakkt disclosed in February that it was experiencing a cash crunch
- Many crypto users believe the reported acquisition is a positive development
Truth Social, President-elect Donald Trump's social media company, is reportedly in advanced discussions to acquire Bakkt, a cryptocurrency trading platform founded in 2018.
Trump Media and Technology Group (DJT), which operates Truth Social, is nearing an all-stock acquisition deal, the Financial Times reported Monday, citing two people with knowledge of the matter.
If the acquisition is concluded soon, Trump will expand his exposure to the crypto industry.
His campaign received massive support from crypto leaders and other prominent figures.
What is Bakkt?
Bakkt is a regulated platform that provides various crypto-related solutions, including trading, end-to-end crypto infrastructure and digital assets custody.
In February, Bakkt announced it might not be able to continue operating, as its funds at the time were insufficient to keep the company afloat for 12 months.
"If we are unable to attract, retain or grow our relationships with our existing clients, our business, financial condition, results of operations and future prospects would be materially and adversely affected," the platform said in a regulatory filing at the time.
This is what regulatory progress looks like: 42 countries have pushed to enact crypto regulations in 2023 alone. Download Bakkt's report, "The Global State of Crypto" for a trove of insights about the international market. https://t.co/2Smva9Ib6E pic.twitter.com/KNL4KHOwZ5
— Bakkt (@Bakkt) April 18, 2024
It also warned that the regulatory atmosphere around blockchain technology and cryptocurrencies were "uncertain." It revealed that it had gone through business alternations in the past to adjust to evolving regulatory regimes, but it expressed concern over future regulatory changes that may adversely affect its business.
Nine months since its cash crunch warning, it appears that Bakkt has found a lifeline.
Trump's Crypto Ventures Ahead of Elections
It is unclear how long the reported DJT and Bakkt discussions have been going, but before Bakkt, there was World Liberty Financial (WLFI), a DeFi project his sons Donald Trump Jr. and Eric Trump were deeply involved in.
The project has been met with hurdles and multiple concerns from crypto users, including supposed code security issues and underwhelming WLFI token sales due to its accredited investor requirement that limits the number of people who can purchase the token.
Trump's Reported Bakkt Move Gets Crypto Nod
Many crypto users on X approved Trump's reported decision to take a deeper dive into the burgeoning sector that saw a significant "Trump bump" since he was elected earlier this month.
"Trump is really into crypto. All the talk wasn't only to win the votes," one user said of the reported Bakkt acquisition, while another user said the move may "signal big things."
At least one user theorized about what the business mogul-turned-president is planning. "Is he trying to create a super app and integrate crypto asset exchange on his platform?" the user wrote.
Trump and DJT have yet to officially comment on the report.
