Bakkt, once touted as the ‘savior’ of Bitcoin, is running low on cash.
Crypto company Bakkt – backed by the Intercontinental Exchange (ISA) and launched to much fanfare in 2019 – has warned that it may not have enough cash to stay in business in the next 12 months.
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The company was founded in 2018 amid much hype from the Intercontinental Exchange, which owns the NYSE. At that time, Bakkt was seen opening the gates of Bitcoin to institutional investors in a bear market.
Bitcoin investor “Jutika” asked her 16,000 X followers how Bakkt managed to keep things simple when the crypto markets soared.
How do you screw things up in a world where ICE and bakkt prices have 10x'd and tradfi institutions dominate startups in the US.
— juthica (@juthica) February 7, 2024
But Bakcht said he doesn't believe the current funding and limited funds will be enough to support the project over the next 12 months.
“As we expand into new markets and grow our revenue base, there is significant uncertainty associated with the rapidly growing environment associated with crypto assets.”
He also warns that he will not be able to achieve sustainable operating profit and sufficient cash flow from it – and that his future success depends on raising capital.
We cannot conclude that we will be able to grow revenues beyond our previous levels to achieve sustained operating profit and sufficient cash flow, and that we will continue to operate the business without raising additional capital in the near term. he said.
Bakht said it is now looking to raise additional capital by issuing securities listed in the public markets to “fund our long-term vision.”
The newly revised Form S-3, once implemented, will allow the company to “issue up to $150 million of registered securities in the public markets to raise additional capital,” he said in a post on X.
The company did not say what the proceeds of the sale would be, saying, “We expect extensive discretion regarding the use of the net proceeds from the sale of our securities,” before adding, “We currently expect to use the net proceeds we receive from this offering for working capital and other general corporate purposes.”
Related: Bakkt Shifts Focus to Escrow Services, Adds Support for DOGE, SHIB, Other Coins
Bakkt is a digital asset platform and payment app that allows institutions to buy, sell, store and withdraw crypto assets. It has formed several strategic partnerships, including Starbucks and AWS, to enable digital asset transactions and services.
Bakkt went public in 2021 when the stock price rose above $40. However, the stock fell 7.6% in afternoon trading on Wednesday to $1.34, down 37% from the start of this year.
