Amid pro-crypto governance, Apex Fintech, is reportedly considering acquiring Bakkt, a cryptocurrency platform spun off from Intercontinental Exchange (ICE). The news, which emerged from an Axios report, follows Bakkt’s acquisition of Apex’s crypto operations in 2022 for up to $200 million.
Apex Fintech Considers Acquisition of Bakkt
Apex Fintech, which is a firm known for integrating stock trading into applications, Bakkt’s shares saw a notable 15% increase in morning trading after the report, reaching $14.86. The surging performance prompted reignited interest from investors.
Founded in 2018, Bakkt was initially positioned as a bridge between traditional finance and digital assets. The platform, supported by major companies like Microsoft, Starbucks, and Boston Consulting Group, started with Bitcoin futures trading in 2019. Its goal was to manage digital assets on a regulated platform, attracting attention as a potential leader in institutional crypto adoption. The company’s launch was met with optimism, further strengthened by its ICE pedigree and regulatory credentials, including a New York BitLicense and trust charter.
However, in spite of these high expectations, Bakkt struggled to meet its goals. After a peak stock price of $42 post-SPAC merger in October 2021, the company faced fierce competition from larger rivals such as Coinbase and Binance, which offered broader coin offerings and more seamless user experiences. Bakkt’s focus on Bitcoin futures and institutional clients did not lead to the widespread adoption it anticipated back then. Moreover, its consumer-facing app, launched in 2021 after acquiring Bridge2 Solutions for $300 million, failed to gain significant traction and was shut down in March 2023.
In response, Bakkt shifted to a B2B2C model and acquired Apex Crypto in 2023, aiming to strengthen its fintech partnerships. However, the platform has underperformed, and Bakkt’s market cap has fallen to $175 million. The company has also been impacted by US regulatory challenges, with the SEC’s 2023 crackdowns forcing Bakkt to delist 25 tokens. As a result, its product offerings have been narrowed to major coins like Bitcoin and Ethereum. Financially, Bakkt reported a $45 million net loss in Q1 2023, and the payment for the Apex acquisition is now expected to be much lower than the original $200 million.
However, with President Donald Trump’s administration and a series of reforms, including the US Securities and Exchange Commission ending litigation against crypto firms like Robinhood, Binance, Gemini, and others, things seem hopeful for the crypto industry. Moreover, Trump recently signed an executive order for a strategic Bitcoin Reserve, further proving the government’s allegiance to the industry. These policy transitions could offer a more favorable environment for Bakkt’s future growth.
