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Bakkt, once hailed as Bitcoin’s potential saviour, is now grappling with a financial crisis that raises doubts about its future.

Launched in 2018 with backing from the Intercontinental Exchange (ICE), the owner of the New York Stock Exchange (NYSE), the crypto platform revealed a precarious financial situation in a filling for an amendment to its quarterly report with the United States Securities and Exchange Commission.

Despite initial aspirations to facilitate Bitcoin transactions for Starbucks customers, Bakkt’s trajectory has shifted towards crypto custody and trading services following its partnership with Nexo for secure custody of crypto assets and its partnership with Sullivan Bank to allow customers to buy, sell, and hold Bitcoin and Ethereum.

The SEC filing suggests Bakkt might not have sufficient cash to sustain operations over the next 12 months. The company cites uncertainties tied to its expansion into new markets and revenue growth amid the evolving crypto landscape. Notably, Bakkt acknowledges the inability to generate sustainable profits and cash flows, pinning its future success on the imperative need to raise capital.

In response to its financial challenges, Bakkt is exploring the issuance of up to $150 million in registered securities in public markets. The move aims to alleviate immediate cash concerns and fund the company’s long-term vision. However, Bakkt remains discreet about the specific use of proceeds, emphasizing flexibility in allocating funds for working capital and general corporate purposes.

Once a high-flying entity, Bakkt went public in 2021 listing on NYSE under the ticker NYSE: BKKT. Shortly after listing, the BKKT stock witnessed a spike to over $40 before freefalling below $10 in two months.

The current state of affairs paints a starkly different picture. Bakkt’s stock traded down 7.6% in after-hours trading on Wednesday, settling at $1.34. This marks a significant decline of 37% since the beginning of 2024, reflecting investor apprehension about the company’s financial stability.

This news unveils a critical chapter in Bakkt’s journey, emphasizing the broader challenges faced by companies seeking to establish themselves in the evolving cryptocurrency industry. The intersection of financial instability, strategic shifts, and market dynamics encapsulates Bakkt’s current predicament.

The post Bakkt, backed by NYSE owner, faces cash crunch; stock plunges appeared first on Invezz

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