Cryptocurrency exchange Bakkt valued at $740m

By Roger Baird on Friday 22 March 2019

Savings and Investment

The platform, owned by the parent company of the New York Stock Exchange, plans to launch later this year.

Bakkt, a cryptocurrency exchange being set by the parent company of the New York Stock Exchange, has hit a valuation of $740m, according to news outlet The Block.

The digital asset trading platform aimed at institutional traders raised $182.5m last year during its Series A funding round. The Intercontinental Exchange (ICE), which owns the platform, may have sold up to 25 per cent of shares in Bakkt to external investors, the report added without citing sources.

The reports adds Bakkt’s $740m post-money valuation is arrived at after adding further financing to its balance sheet, including equity allocated to coffee giant Starbucks, which is a founding partner of the platform.

Bakkt’s proposed fee of $0.50 per contract is small, some equating it to less than 1 basis point, or 7 basis points lower than the next cheapest US exchange trading option.

“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. A lot of things will need to line up for investors to receive returns that they would typically expect for a Series A,” one source reportedly said.

The launch of Bakkt by a major exchange owner with institutional backing is regarded as a big step for cryptocurrencies, and could boost the adoption of Bitcoin and other digital assets.

Last August, ICE chief executive Jeff Sprecher announced the platform would launch, but it has been delayed twice due to regulatory issues. It is now expected to to begin trading in the second quarter of this year.

The US Commodity Futures and Trading Commission commissioner Dan Berkovitz said this week on BlockTV it faced unique challenges dealing with the platform’s decentralised and permissionless blockchain technology. However, he added that working on Bakkt’s trading application was a “priority” for the regulator.


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