Just two weeks after proclaiming an expansive global endeavor, Bakkt, a digital asset firm that was once in partnership with major names like Starbucks and Mastercard, has informed the Securities and Exchange Commission (SEC) of its impending financial strain, expressing concerns about its sustainability until 2025.
In a recent SEC filing, Bakkt attributed its financial challenges to the rapidly changing landscape within the cryptocurrency industry. The company, with roots connected to the New York Stock Exchange, acknowledged that it lacks the necessary funds to maintain operations for the next 12 months.
In an amendment to its November quarterly report, Bakkt updated its risk disclosures, coinciding with its announcement of a significant international expansion. The company stated, “There is significant uncertainty associated with our expansion to new markets and the growth of our revenue base given the rapidly evolving environment associated with crypto assets.” Consequently, Bakkt admitted uncertainty about substantially increasing revenues without securing additional funding in the near future.
Established in 2018 as a crypto platform under Intercontinental Exchange, the owner of the New York Stock Exchange, Bakkt initially focused on facilitating consumer use of digital assets through partnerships with major brands. However, after going public via a Special Purpose Acquisition Company (SPAC) in 2021, the company shifted its strategy to providing crypto trading and custody services to financial institutions and fintech companies.
Bakkt’s altered approach, described as a “business-to-business-to-consumer approach,” aimed to embed crypto solutions into client environments to power commerce. Despite this shift, Bakkt continued to engage with consumers, acquiring Apex Crypto in April and renaming it Bakkt Crypto Solutions. Regulatory scrutiny prompted Bakkt to delist numerous crypto assets from the acquired platform, including Solana and Cardano.
Late last month, Bakkt announced its international expansion plans, focusing on Latin America and Asia. However, the company acknowledged that this expansion introduced uncertainties, exacerbated by the broader crypto market downturn and the collapse of major industry players like FTX.
In the SEC filing, Bakkt emphasized that its business transformation heightened risks and uncertainties, including the possibility of insufficient revenue to prevent a cash shortage. The company is now actively seeking additional financing to meet its financial needs over the next year.
Bakkt’s stock price on the NYSE (BAKKT/NYSE), already experiencing a nearly 90% decline over the past year, further dropped from its daily high of $1.47 to $1.29 shortly after the revised quarterly SEC filing.
