Bakkt, a crypto infrastructure company listed on the New York Stock Exchange (NYSE) under the ticker BKKT, is making roars in the crypto industry with plans to raise $1 billion from investors.
According to a Fortune report, this move aims to enhance its corporate assets by incorporating digital currencies into its treasury strategy, positioning Bakkt alongside a growing number of companies embracing cryptocurrency.
Bakkt’s Digital Asset Strategy
In a recent filing with the Securities and Exchange Commission (SEC), Bakkt outlined its intention to issue up to $1 billion in securities, which may include common and preferred stock.
While the company did not explicitly state that these funds would be used to purchase cryptocurrencies, the filing revealed an updated investment policy permitting the acquisition of Bitcoin and other digital assets.
The filing notes that Bakkt may acquire Bitcoin or other digital assets using excess cash, proceeds from future equity or debt financings, or alternative capital sources. However, the timing and extent of these transactions will depend on various factors, including market conditions and business performance.
Despite the potential upsides, Bakkt’s SEC filing also highlighted several risk factors associated with its updated investment policy. Among the twelve risks listed, the company acknowledged that its financial results and the market value of its securities could be significantly affected by the volatility of digital assets.
Corporate And National Crypto Treasuries
Bakkt’s initiative comes at a time when more companies and countries are exploring the establishment of their own crypto treasuries to diversify their balance sheets.
For instance, Michael Saylor’s software company, Strategy (formerly MicroStrategy), has been accumulating Bitcoin since 2020, amassing nearly 600,000 Bitcoin valued at over $60 billion. This has resulted in a 3,000% increase in its stock price, MSTR, over the past five years.
The trend gained momentum following an executive order signed by President Donald Trump earlier this year, which advocated for the creation of a national Bitcoin reserve alongside other digital assets like Ethereum.
More recently, GameStop, the video game retailer, announced its own plan to purchase Bitcoin, building a stockpile worth over $500 million.
In April, consumer products company Upexi revealed it would raise $100 million to start accumulating Solana, the sixth-largest cryptocurrency by market capitalization. Additionally, the Trump Media and Technology Group announced intentions to raise $2.5 billion to establish a Bitcoin treasury.
As of press time, BKKT closed the trading week on the NYSE at $12.78, down a little over 4% within 24 hours. Compared to its highest valuation of $1,270 per share in 2021, BKKT has fallen 99%.
Featured image from DALL-E, chart from TradingView.com
