Bakkt is Valued at $740 Million

Bakkt is Valued at $740 Million


The much-anticipated crypto platform Bakkt, established by the Intercontinental Exchange (ICE),  is valued by investors at around $740 million, the Block reports.

The project successfully closed the $182.5 million Series A funding round in December 2018. It attracted the participation of such high-profile companies as Pantera, Galaxy Digital, Microsoft and Starbucks. As reported by Block, the ICE decided to sell around 25% of the company in exchange for $182.5 million, thus placing a $740 million valuation on the crypto exchange.

Earlier this month, it was reported that Bakkt and Starbucks reached a deal to enable Starbucks customers to pay with cryptocurrencies, while the coffee giant will get a part of the company in return. Thus, unlike Pantera, Galaxy or Microsoft, Starbucks hasn’t contributed to Bakkt with direct capital.

Investors have raised concerns at Bakk’t business model as they see a proposed $0.50 fee per contract as too low. One source, cited by Block, adds that “from a cash-flow perspective, Bakkt will not be earning much based on their proposed contract fees, so they really need a lot of volume”.

The Intercontinental Exchange (ICE), NYSE’s parent company, announced plans to launch crypto trading platform last year. In October, Newconomy reported about plans to launch the platform in December. However, the launching has been delayed due to delay on obtaining approval from the Commodity Futures Trading Commission (CFTC), WSJ reports.

“We are working through the regulatory review process and are looking forward to updating the market soon,” the spokesperson for the ICE told WSJ.

The main stumbling block concerns Bakkt’s bitcoin futures, which would be physically delivered on a daily basis. In its business model, the exchange foresees custody over customers’ asset via its physical warehousing. Accordingly, the CFTC would “require disclosures of the venture’s business plan and a public comment period, which would have further delayed approval”.

As reported by media last month, Bakkt is trying to expedite the process with CFTC and is considering a request for a license from the New York Department of Financial Services (NYDFS) as a possible solution.

ICE currently operates 12 regulated platforms and exchanges, including the NYSE, the world’s second biggest stock market exchange.