Amid pro-crypto governance, Apex Fintech Considers Acquisition of Bakkt

Apex Fintech is reportedly considering acquiring Bakkt, a cryptocurrency platform spun off from Intercontinental Exchange (ICE), according to an Axios report. This news comes after Bakkt’s acquisition of Apex’s crypto operations in 2022 for up to $200 million.

Apex Fintech Considers Acquisition of Bakkt

Apex Fintech is known for integrating stock trading into applications. Following the report, Bakkt’s shares surged by 15% in morning trading, reaching $14.86, attracting renewed investor interest.

Founded in 2018, Bakkt aimed to bridge traditional finance and digital assets, receiving support from major companies like Microsoft, Starbucks, and Boston Consulting Group. It began Bitcoin futures trading in 2019, with aspirations of managing digital assets on a regulated platform, positioning itself as a leader in institutional crypto adoption. Its launch was met with optimism due to its ICE pedigree and regulatory credentials, including a New York BitLicense and trust charter.

However, Bakkt struggled to meet expectations. After peaking at $42 post-SPAC merger in October 2021, it faced stiff competition from larger rivals like Coinbase and Binance, which offered broader coin options and better user experiences. Bakkt’s focus on Bitcoin futures and institutional clients didn’t lead to widespread adoption. Its consumer-facing app, launched in 2021 after acquiring Bridge2 Solutions for $300 million, failed to gain traction and was shut down in March 2023.

In response, Bakkt shifted to a B2B2C model and acquired Apex Crypto in 2023 to enhance its fintech partnerships. Despite these efforts, Bakkt has underperformed, experiencing a market cap drop to $175 million. The company also faced US regulatory challenges, with the SEC’s 2023 crackdowns forcing Bakkt to delist 25 tokens, limiting its offerings to major coins like Bitcoin and Ethereum. For Q1 2023, Bakkt reported a $45 million net loss, and payment for the Apex acquisition is expected to be significantly lower than the original $200 million.

Nonetheless, with the Trump administration enacting reforms, including the SEC ending litigation against crypto firms, the outlook for the crypto industry appears optimistic. Trump’s signing of an executive order for a strategic Bitcoin Reserve further indicates government support for the sector. These policy changes might create a more favorable environment for Bakkt’s future growth.