According to Bakkt, all hope is not lost though. The firm has put forward a new plan that it believes will set it right back on the path to success.
Bakkt, a crypto firm, which is backed by Intercontinental Exchange (ICE) may currently be facing a huge financial crisis. This follows after the institutional digital asset trading platform recently revealed, in a filing with the Securities and Exchange Commission (SEC), that there is an air of uncertainty over the survival of its business.
The February 7 filing, which contained an amendment to Bakkt’s quarterly report, highlighted some risk factors. According to the company, these factors suggest that it may no longer have enough cash to keep running its business.
Did Bakkt Fumble Its Prospects?
Bakkt was founded in 2018 but didn’t launch until 2019. However, its founding days were accompanied by huge publicity and expectations. At the time, many saw Bakkt as a welcome bridge that would connect Bitcoin to institutional investors.
Unfortunately, the company may now have failed to live up to the hype that was undoubtedly boosted by ICE’s backing.
Meanwhile, it appears that stakeholders are now more than curious about Bakkt’s latest revelation. Investors including an X user identified as Juthica, wonder why Bakkt is saying this at a period when crypto markets are surging.
how did ICE and bakkt so terribly bungle things in a world where price has 10x’d and tradfi institutions have dominated over startups in the US
— juthica (@juthica) February 7, 2024
The firm, however, has also responded to the public outcry. It says that it has reasons to believe that its cash and restricted cash may not be enough to fund its operations over the next 12 months. Part of its statement reads:
“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.”
Firm Reveals New Plans
According to Bakkt, all hope is not lost though. The firm has put forward a new plan that it believes will set it right back on the path to success.
Bakkt will now be looking to raise capital as the only way for it to be able to increase revenues. This will also help it to generate sustainable operating profit and satisfactory levels of cash flow, the firm concluded.
The idea is to raise additional capital by issuing its registered securities in the public markets. According to a now-deleted X post, it appears that Bakkt intends to “issue up to $150 million in registered securities in the public markets”.
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