Bakkt (BKKT) Plunges 42.4% as Discounted Offering, Asset Sale Signal Financial Distress

Bakkt Holdings (BKKT) plunged 42.4% intraday on July 29, 2025, hitting its lowest level since May 2025, marking a 59.55% drop over four days. The selloff followed a $75 million public offering priced at $10/share—a 41% discount to its prior close of $17.17—and the simultaneous sale of its loyalty business for $11 million. These moves, framed as strategic pivots to focus on “pure-play crypto infrastructure,” instead signaled acute financial distress and triggered widespread investor skepticism. The offering diluted existing shareholders, while the divestiture underscored operational fragility and a lack of diversified revenue streams.

The strategy of buying BKKT shares after they reach a recent low and holding for one week resulted in a significant loss. Over the past five years, the strategy yielded a return of -86.09%, compared to a benchmark return of 61.05%. The excess return was -147.14%, and the CAGR was -53.96%. The strategy also had a high maximum drawdown of 0.00% and a sharp volatility of 147.88%, indicating significant risk and substantial losses.

Weak preliminary Q2 2025 results further exacerbated concerns. Crypto revenues of $568–569 million nearly offset related costs of $565–566 million, leaving minimal profitability. The company projected net cash outflows of $13–15 million for the quarter, with only $60–62 million in available liquidity. Loss of major clients, including Webull (74% of 2024 crypto revenue) and Bank of America (16% of 2024 loyalty revenue), compounded these challenges, highlighting overreliance on a narrow client base. Management’s pivot to crypto infrastructure remains unproven, with no prior treasury strategy execution in crypto purchases.

Broader market dynamics also weighed on BKKT. A broader crypto sector slump, regulatory uncertainty, and leverage unwinds amplified investor flight. While Bitcoin showed relative resilience, altcoins like Dogecoin and Solana tumbled, dragging down sector peers like Coinbase Global (-2.09%). Technical indicators reinforced bearish sentiment: the stock traded 26% below its 200-day moving average ($16.12), with RSI and MACD signaling downward momentum. Key support levels at $11.07–$11.58 and $12.34 now loom as critical thresholds.

Leadership framed the strategic shifts as necessary to streamline operations, but investors questioned the prudence of discounted fundraising and asset sales. The $11 million loyalty business sale, adjusted for negative working capital and a short-term loan, underscored its limited value. Despite historical backtests suggesting a 43.96% probability of a 30-day rebound after such a drop, immediate sentiment remains bearish. Governance risks, including lack of crypto execution experience and diluted shareholder value, have eroded confidence. For now, the stock’s trajectory hinges on Bakkt’s ability to stabilize liquidity and deliver on its treasury strategy without further panic-driven capital raises.