Bakkt Plans $1 Billion Raise for Crypto Treasury Strategy

Bakkt, a prominent crypto infrastructure company, has initiated plans to raise $1 billion from investors. This move is part of a broader strategy to incorporate digital assets into its corporate treasury, positioning itself as another firm exploring the potential of a crypto treasury. Bakkt, listed on the New York Stock Exchange under the ticker BKKT, filed a form with the Securities and Exchange Commission (SEC) on Thursday to issue up to $1 billion worth of securities, including common stock and preferred stock.

The filing does not explicitly state that the $1 billion will be used to purchase crypto, but it highlights that Bakkt has recently updated its investment policy to allow for the acquisition of Bitcoin and other cryptocurrencies as part of its treasury strategy. The company's filing notes, “We may acquire Bitcoin or other digital assets using excess cash, proceeds from future equity or debt financings, or other capital sources, subject to the limitation set forth in our Investment Policy.” The timing and scale of such transactions will depend on various factors, including market conditions, capital market receptivity, business performance, and other strategic considerations.

Bakkt's updated investment policy comes at a time when an increasing number of companies are establishing their own crypto treasuries to diversify their balance sheets. One notable example is Michael Saylor’s software company, Strategy, which has been accumulating Bitcoin since 2020. Strategy has amassed nearly 600,000 Bitcoins, valued at over $60 billion at its current price, and has seen its stock price surge over 3,000% in the past five years as the value of Bitcoin has increased.

This trend gained momentum after the signing of an executive order to establish a national Bitcoin reserve and separate stockpile of other digital assets like Ethereum and XRP. In recent months, both crypto and non-crypto companies have embraced this trend. For instance, GameStop, the video game retailer, announced in March that it would begin buying Bitcoin, now holding a stockpile worth over $500 million. In April, consumer products company Upexi announced plans to raise $100 million as part of a pivot to accumulate Solana, the sixth-largest cryptocurrency by market cap. Additionally, Trump Media and Technology Group, the company behind Truth Social, announced in May that it would raise funds to establish a Bitcoin treasury.

While adopting a crypto treasury strategy has been beneficial for some companies, Bakkt’s SEC filing acknowledges several risk factors associated with their updated investment policy. Among the 12 risk factors listed, the filing states that Bakkt’s financial results and the market price of its securities “are expected to be affected by fluctuations in the price of digital assets we may acquire…which are highly volatile assets.” This highlights the potential impact of market volatility on the company’s overall performance.