Bakkt Plans $1 Billion Raise for Bitcoin Purchases Amid Financial Uncertainty

Bakkt Holdings Inc., a crypto-focused subsidiary of Intercontinental Exchange, has filed a Form S-3 with the US Securities and Exchange Commission (SEC) outlining its intent to raise up to $1 billion through various securities offerings. This capital may be used to purchase Bitcoin and other digital assets, indicating a potential shift in the company's treasury strategy. Earlier this month, Bakkt updated its investment policy to allow for allocations into digital assets, although it has not yet made any cryptocurrency purchases. The company stated that any future acquisitions of crypto assets will be determined based on market conditions, business performance, capital market receptivity, and other strategic factors.

However, this move comes at a challenging time for Bakkt. The company admitted in the same filing that it faces financial uncertainty and has a limited operating history and ongoing operational losses. Moreover, it disclosed that it “identified conditions and events that raised substantial doubt about our ability to continue as a going concern.” This means that raising new capital will be crucial to stabilize its financial footing. Despite these challenges, Bakkt saw a modest 3% uptick in its share price on Thursday, closing at $13.33. Still, the stock is down 46% since the beginning of the year, partly due to the loss of major clients like Bank of America and Webull, which chose not to renew their commercial agreements.

Bakkt is still optimistic about the future of digital assets. The company recently shared its excitement about a wave of upcoming crypto IPOs, including filings from Circle, eToro, and Gemini. In a post on X, Bakkt described these developments as positive indicators that suggest growing institutional momentum and maturity in the crypto market. This approach aligns with the broader trend among tech and finance companies incorporating Bitcoin into their balance sheets.

Meanwhile, The Smarter Web Company, a UK-based web design and marketing firm, recently raised £41.2 million from institutional investors just days after making a large Bitcoin purchase. The capital was secured through an accelerated bookbuild process and a subscription offering, allowing the company to raise £36.27 million from the bookbuild and an additional £4.97 million from subscription participants. The shares were offered at a price of £2.90 ($3.98) each, with the new stock expected to take effect from July 1. This fundraising effort closely followed the company’s announcement that it bought 196.8 Bitcoin at an average price of $103,290 per BTC. It ended up spending over $20 million on the purchase. As of Tuesday, The Smarter Web Company held a total of 543.52 Bitcoin, which was acquired at an average price of $104,450. This means that its crypto treasury has a valuation of around $58.19 million based on current prices. The company has been actively growing its Bitcoin holdings, and increased its stack by 460.28 BTC in June alone. At the end of May, the firm held only 83.24 BTC. The company began its Bitcoin treasury strategy in April, although it has accepted Bitcoin as a form of payment since 2023.

Other firms are finding creative ways to stock up on crypto. Genius Group, an artificial intelligence-driven education technology firm, announced plans to distribute any proceeds from ongoing billion-dollar lawsuits directly to shareholders while allocating a large portion to expanding its Bitcoin treasury. In a press release that was issued on Thursday, the company’s board of directors approved a strategy to repurpose potential winnings from two legal cases seeking over $1 billion in combined damages. One of the lawsuits has already been filed under the Racketeer Influenced and Corrupt Organizations Act (RICO), targeting LZGI International with claims exceeding $750 million. The second lawsuit, according to CEO Roger Hamilton, is expected to be filed soon. Based on 2023 figures, Genius Group estimates damages of at least $262 million, although the amount could grow as it accounts for potential harm from 2024 and 2025. Hamilton explained that the legal actions are designed to recover shareholder value lost due to alleged misconduct by the defendants. He also affirmed the board's position that any recovered funds should be used solely to benefit shareholders. Under the proposed distribution model, 50% of any legal winnings will be paid out as a special dividend, while the remaining 50% would be allocated to purchasing Bitcoin for the company’s treasury. If Genius Group successfully wins both cases, the payout will amount to approximately $7 per share, and the firm would acquire around 5,000 Bitcoin based on current market prices. The company clarified, however, that there is no guarantee of winning either case or receiving any proceeds. Genius Group has already made moves to build its Bitcoin holdings. In fact, it increased its treasury by over 50% in June through a series of acquisitions. The company is targeting a total of 1,000 BTC for its corporate treasury.