Bakkt Holdings Inc., a crypto software firm owned by the Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange has announced plans to raise up to $1 billion through a shelf registration, according to a recent filing with the US Securities and Exchange Commission (SEC). This move could pave the way for the firm to start buying Bitcoin and other cryptocurrencies as part of its updated treasury strategy.
What is Bakkt’s $1B Shelf Registration?
A shelf registration allows a company to register a large number of securities in advance, which it can then sell over time without having to file separate paperwork for each offering. This gives companies quick access to capital markets when market conditions are favourable.
Bakkt’s filing reveals it could issue up to $1 billion worth of a mix of:
Class A common stock
Preferred stock
Debt securities
Warrants
Or combinations of these instruments
Importantly, the filing also confirmed Bakkt has updated its investment policy to allow the purchase of Bitcoin and other digital assets as part of its corporate and treasury strategy. However, as of now, the company has not made any actual crypto purchases.
An excerpt of Bakkt’s regulatory filing. Source: SEC
“We may acquire Bitcoin or other digital assets using excess cash, proceeds from future equity or debt financings, or other capital sources,” the company stated in its filing.
Bitcoin Buys – A Strategic Shift
This filing marks a significant shift in Bakkt’s approach. Originally launched in 2018, the company focused on building infrastructure for digital asset payments and custody. Now, it seems Bakkt is leaning more into holding crypto assets themselves, similar to how companies like MicroStrategy and Tesla added Bitcoin to their balance sheets.
The updated investment policy allows Bakkt to make such purchases when the timing is right. However, the firm clarified that any Bitcoin or crypto buys will depend on:
Market conditions
Business performance
Capital availability
Strategic opportunities
This flexibility could allow Bakkt to move swiftly during bullish market periods or when digital asset prices dip.
Financial Struggles and ‘Going Concern’ Warning
Despite this bold move, Bakkt is facing serious financial headwinds.
In its SEC filing, Bakkt openly admitted to a “limited operating history” and a “history of operating losses.” More concerning, it also flagged “substantial doubt” about its ability to continue operating as a “going concern” an accounting term indicating a risk that the company may not be able to meet its financial obligations in the near future.
Bakkt’s recent troubles have included the loss of key clients. In March, its stock fell over 30% after announcing that Bank of America and Webull would not renew their commercial agreements with the firm.
Market Reaction and Bakkt’s Outlook
After the announcement of the shelf offering, Bakkt’s share price saw a small 3% rise, closing at $13.33. However, the stock remains down 46% year-to-date, highlighting ongoing investor concern over the firm’s future performance.
BKKT price year-to-date. Source: Google Finance
Despite these challenges, Bakkt remains bullish on the broader crypto market. In a recent post on X (formerly Twitter), the firm responded positively to the growing number of crypto IPOs, including those from Circle, eToro, and Gemini.
“These developments bring validation, visibility, and maturity to the market,” Bakkt said, hinting that the crypto industry is once again gaining real momentum.
Bakkt’s $1 billion shelf offering signals a renewed focus on crypto assets, potentially aligning the firm with other major companies that have diversified into digital assets. While this could be a strategic opportunity to ride the next crypto bull run, investors should remain cautious given the company’s financial instability and the uncertainty around its operations.
The next few months will be crucial. Whether Bakkt becomes a new corporate Bitcoin holder or continues to struggle financially may depend on market sentiment, successful capital raising, and clear execution of its updated strategy.
