Bakkt Plans $1 Billion Raise for Bitcoin Purchases

Bakkt Holdings Inc., a crypto software firm and subsidiary of The Intercontinental Exchange, has filed a Form S-3 with the US Securities and Exchange Commission, announcing plans to raise up to $1 billion through various securities offerings. This move is seen as a potential catalyst for Bitcoin purchases, as the company has updated its investment policy to allocate capital into Bitcoin and other digital assets. The offerings could include common stock, preferred stock, debt securities, warrants, or combinations of these assets.

The shelf registration allows Bakkt to access capital markets swiftly when conditions are favorable, which is crucial given the company's history of losses and going concern issues. Bakkt, founded in 2018, has acknowledged its limited operating history and a history of operating losses. The filing also highlights specific conditions and events that raise substantial doubt about the company's ability to continue as a going concern.

The timing and magnitude of any crypto purchases will be determined by market conditions, capital market receptivity, business performance, and other strategic considerations. Bakkt has not yet made its first purchase of Bitcoin or other digital assets but has stated that it may acquire these using excess cash, proceeds from future equity or debt financings, or other capital sources.

Bakkt's recent share price performance has been volatile, with a 3% rise on the day of the filing to reach $13.33. However, the stock has declined by 46% since the start of the year. This volatility is partly attributed to the non-renewal of commercial agreements with two of its largest clients, which led to a 30% drop in March.

Despite these challenges, Bakkt remains bullish on the crypto market, commenting on the recent slate of crypto IPO filings from companies. The firm views these developments as indicative of real momentum building in the digital asset space, bringing validation, visibility, and maturity to the market. This optimism suggests that Bakkt is positioning itself to capitalize on the growing interest and investment in cryptocurrencies, potentially using the proceeds from its securities offerings to fuel further Bitcoin buys.