Monday brought a whirlwind to the crypto world as Bakkt Holdings Inc (BKKT) saw its share price catapult over 162%. The surge came after a Financial Times report suggested that Donald Trump’s media firm was in advanced talks to acquire the crypto exchange. Investors watched as Bakkt’s price skyrocketed from $11.32 to $29.71 by the end of trading on November 18, later climbing another 16.43% in after-hours trading to reach $34.59. Trump Media and Technology Group (DJT), which runs the Truth Social platform, mirrored the excitement, with its stock price gaining 16.65%, although it slid back about 3.5% in after-hours trading.
The reported deal, if it comes to fruition, could represent Trump’s most ambitious step yet into the world of crypto. The Financial Times cites two anonymous insiders familiar with the negotiations, noting that Trump Media is considering an all-share acquisition of Bakkt, which is currently owned by Intercontinental Exchange (ICE). Trump himself holds a 53% stake in Trump Media, and with his return to political prominence, the timing has sparked rampant speculation in crypto circles.
Crypto markets have been on a high since Trump’s recent election victory. Bitcoin has shot up around 30% as the campaign pledged a series of pro-crypto policies, including developing a strategic Bitcoin reserve and eliminating regulatory hurdles that have long constrained the crypto industry. The mere possibility of a Bitcoin stockpile held by the United States government sent shivers of excitement through the market, though the path to such an outcome would be far from straightforward.
Trump’s promises to the crypto sector appear to have rallied investor confidence, with many viewing his win as a catalyst for a less restrictive regulatory environment. He’s made no secret of his support for digital assets, even licensing his image for multiple NFT projects. And let’s not forget the ongoing venture his family is championing, World Liberty Financial, a crypto project set to give the Trumps a hefty 75% cut of the associated fees.
Despite the bold promises, the road to making a Bitcoin reserve reality could be fraught with challenges. Establishing a national Bitcoin reserve would almost certainly require congressional approval. Bitcoin’s volatility and speculative nature make it a contentious asset among U.S. lawmakers, and many might balk at the idea of the government holding crypto. However, financial experts have floated workarounds. Izabella Kaminska of The Blind Spot news outlet commented on X (formerly Twitter) about the possibility of using a special purpose vehicle (SPV) to sidestep congressional hurdles. An SPV would isolate risk and operate separately from Trump Media’s primary activities, focusing solely on the acquisition and management of Bitcoin.
The reported acquisition deal, however, doesn’t come without caveats. Even after the surge in Bakkt’s stock price, the exchange has faced ongoing financial struggles. It’s valued at just over $400 million after Monday’s dramatic gains, but it has yet to achieve profitability. Further, Bakkt’s crypto custody business, once a promising venture, never managed to take off. The firm has announced plans to shut down this division, and the Financial Times indicated that it wouldn’t be part of any deal with Trump Media.
Intercontinental Exchange, Bakkt’s parent company, offered no comment when questioned about the reported talks. Both Trump Media and Bakkt were similarly silent, providing no immediate responses. The uncertainty only adds to the intrigue. If Trump Media does succeed in acquiring Bakkt, questions about strategic direction and profitability will loom large.
Nevertheless, the prospect of Trump’s involvement in crypto seems to be boosting sentiment across the market. His previous endorsements of digital assets and continued public interest have given crypto enthusiasts reason to hope for a more favourable landscape. Yet, as with all things Trump, the future remains unpredictable. While the market has reacted positively, the feasibility of realising these grand plans, especially the Bitcoin reserve, will depend on navigating political, regulatory, and financial challenges.
Still, it’s hard to ignore the potential impact. With Trump’s return to the political scene and his increasing entanglement with crypto ventures, the narrative has become compelling theatre. The idea of a United States president holding significant sway over the crypto landscape would have seemed absurd a few years ago, but the current momentum has left many reconsidering what’s possible.
Even so, sceptics abound. The cryptocurrency world, for all its promise, remains a volatile and speculative arena. The notion of governments adopting Bitcoin has often been met with derision, and Trump’s ideas won’t be immune to scrutiny. Whether this reported deal signifies a genuine shift or is just another headline-grabber, it has certainly succeeded in stirring the pot. For now, all eyes remain fixed on what could be the most audacious move in Trump’s growing list of crypto endeavours.
