Bakkt Plans $1 Billion Offering to Boost Bitcoin Strategy

Bakkt, a publicly traded crypto custody and loyalty rewards firm, has announced plans to raise up to $1 billion through an equity and debt offering. This move is part of a broader strategy to support a "Bitcoin strategy" and was revealed through filings submitted to the US Securities and Exchange Commission on June 26. The shelf offering could include the sale of Bakkt’s Class A common stock, preferred stock, warrants, and debt securities, marking a significant strategic shift for the company. However, it is important to note that Bakkt has not yet made any crypto purchases, according to the SEC filing.

Bakkt's filing for a shelf registration with the SEC allows the firm to sell a mix of securities mentioned in the prospectus in one or more offerings. The total price for the securities Bakkt sells will not exceed $1 billion. The SEC also required the company to include the price they would pay for those securities and the amount of money they expected to make from the sale. This filing comes after Bakkt updated its investment policy on June 10 to allocate capital into Bitcoin and other digital assets as part of its treasury and corporate strategy.

Founded in 2018, Bakkt has evolved into a crypto treasury firm that allows investors to make leveraged bets on digital assets such as Bitcoin, ETH, and SOL by financing digital asset purchases in traditional capital markets. Initially backed by the New York Stock Exchange owner Intercontinental Exchange, Bakkt offered an institutional-grade trading platform for daily physically-settled Bitcoin futures before attempting to tokenize rewards points and crypto custody. However, these products failed to gain traction, and the company went public in 2021.

Bakkt's initial Chief Executive Officer, Kelly Loeffler, resigned in 2019 to briefly serve as a Republican United States senator in Georgia under the first Trump administration. Additionally, there were reports in November that President Donald Trump’s social media company, Truth Social, was in “advanced talks” to acquire Bakkt.

Following the announcement of the updated investment policy, Akshay Naheta, co-CEO of Bakkt, stated that this plan aims to transform Bakkt into a company focused solely on crypto infrastructure. This strategy allows Bakkt to add Bitcoin and other digital assets to their treasury carefully. Naheta's speculations indicate that their strategy shows a strong belief in the future of digital assets and a goal for Bakkt to grow globally and become a leader in programmable money.

Andy Main, Co-CEO and President of Bakkt, also commented on the updated investment policy, stating that it reflects the company's confidence in digital assets’ long-term potential and dedication to seeking strategic opportunities that increase shareholder value. Main highlighted that this is a significant step for the company as it looks to expand into global payments and remittance systems using stablecoins while being part of the ongoing development of the digital asset ecosystem.

Bakkt's filing for a shelf registration with the SEC is a strategic move that underscores the company's ambition to capitalize on the growing interest in digital assets. By securing this shelf registration, Bakkt can issue securities on a continuous basis over the next three years, providing flexibility in raising funds as needed. This move is likely to enhance Bakkt's competitive edge in the rapidly growing crypto market, as the company focuses on developing new products and services that meet the evolving needs of its customers.