| Peter Wind

Key highlights:

  • Digital assets business Bakkt is reportedly looking to go public
  • According to a Bloomberg report, Bakkt is in “advanced talks” to merge with VPC Impact Acquisition Holdings, a SPAC
  • The new business entity would be valued at over $2 billion

Bakkt is looking to go public through merger with SPAC, per report

Bakkt, the digital assets business backed by NYSE operator Intercontinental Exchange (ICE), is looking to go public by merging with VPC Impact Acquisition Holdings, per a Bloomberg report.

Bakkt, which is primarily targeting institutional players, currently offers Bitcoin futures contracts and options. The company is also working on an app that would allow users to store and spend different digital assets, ranging from cryptocurrencies to loyalty points and video game items. 

According to Bloomberg’s sources, the company resulting from the merger would be valued at above $2 billion. 

VPC Impact Acquisition Holdings is a SPAC, or special purpose acquisition company, connected to Victory Park Capital. These companies do not have their own commercial operations, but are instead designed to raise capital through an IPO and later merge with existing companies. SPACs essentially allow companies to go public faster without going through the standard IPO process.

VPC Impact Acquisition Holdings held an IPO in September last year, raising $200 million. Given the red-hot cryptocurrency markets, it’s not surprising to see that the price of its shares spiked following the Bloomberg report. According to Yahoo Finance, the company’s shares closed at $11.08 yesterday but are now trading at $19 before hours after a 72.8% jump. 

Bakkt was one of the hottest stories in the cryptocurrency market in 2018 and 2019. First announced in August 2018, the crypto community was speculating that Bakkt would finally bring institutional players to the cryptocurrency space due to the company’s impressive list of backers, which includes the likes of ICE, Microsoft, Boston Consulting Group and Starbucks. While institutional investors did enter the cryptocurrency markets in a big way in 2020, it was not necessarily through Bakkt. The company’s futures contracts are seeing relatively modest trading volume.

According to cryptocurrency derivatives analytics platform Skew, Bakkt saw $93 million worth of trading volume on its Bitcoin futures on January 7. On the same day, the CME’s Bitcoin futures recorded $3.8 billion worth of volume.



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