- Trump Media is reportedly in talks to to buy crypto firm Bakkt.
- The FT reported Monday that Trump Media could acquire the company in an all-stock deal.
- Digital assets rallied on Tuesday, fueled by fresh optimism around Trump's support for crypto.
Donald Trump's media firm could soon offer cryptocurrency trading, with the Truth Social parent company reportedly in talks to acquire Bakkt.
The Financial Times reported this week that the President-elect's media company could buy crypto-trading platform Bakkt in an all-stock deal.
The report sent the company's shares soaring as much as 250% on Monday before paring that gain to about 175%. They were up another 4.7% on Tuesday, trading at $31.11.
Here's what you need to know.
1. What is the deal?
Trump Media & Technology Group is in talks to purchase Bakkt, two sources told the FT.
Per the report, Trump Media could acquire Bakkt in an all-stock deal, meaning it will use its own shares as currency in the transaction.
It's a smart move for the media company given the stock's huge gains in the weeks leading up to the election as "Trump trades" rallied ahead of the vote. While Trump Media stock was down almost 9% on Tuesday, it's gained about 30% since August.
It isn't known what Bakkt's valuation will be in a potential sale, but as of Tuesday afternoon, the stock had a market capitalization of about $200 million.
Trump Media is valued at around $6 billion. It reported a loss of $19.2 million in the third quarter. Trump owns a 53% stake in the company.
If the deal goes through, it wouldn't be Trump's first foray into crypto. The President-elect signaled strong support for bitcoin on his campaign trail. He has debuted his own NFTs and even launched a stablecoin with digital asset firm, World Liberty Financial, in October.
In a statement published on Tuesday, Bakkt said it was aware of "rumors" that had emerged over a "potential transaction," but said it was against policy to comment further. Trump Media and Bakkt didn't immediately respond to a request for comment from Business Insider.
2. What is Bakkt?
Bakkt is a cryptocurrency trading platform created by Intercontinental Exchange, the parent company of the New York Stock Exchange.
The crypto firm, which was created in 2018 and went public in 2021, has struggled to turn a profit. According to its third-quarter results, the company reported an operating loss of $27.4 million.
The stock has also struggled. Earlier this year, Bakkt risked being de-listed from the New York Stock Exchange for having shares trade less than $1 for 30 straight days. In March, Bakkt told the NYSE it intended to "cure the stock price deficiency," per a statement on its website, and the company initiated a 1-for-25 reverse stock split in April.
3. Who are the big players?
ICE, the company that owns the New York Stock Exchange, holds a 55% stake in Bakkt.
Bakkt's first CEO, Kelly Loeffler, is a former Republican senator from Georgia. According to a statement from Trump's campaign, she will co-chair Trump's inaugural committee. The statement described her as one of the President-elect's "longtime friends and supporters."
Loeffler's husband, Jeff Sprecher, is the founder and CEO of the Intercontinental Exchange and chairman of the New York Stock Exchange. Sprecher is also a major Republican donor, according to data from the nonprofit group OpenSecrets.
Bakkt is now led by CEO and president Andy Main.
4. The potential deal adds to the swell of crypto bullishness since the election
Crypto markets cheered the news, with the move seen as a further endorsement of Trump's support for the space. Bitcoin was up 3.6% to trade at a fresh all-time high above $93,500 as of 2:10 p.m. on Tuesday.
Other cryptos have also rallied on Trump's plans for his second term.
Dogecoin soared after Trump appointed Elon Musk to head the Department of Government Efficiency. Musk has been a vocal dogecoin enthusiast, sending the coin soaring with his posts on X in recent years. The meme coin was up almost 11% Tuesday, trading above $0.40.
The total market value of all cryptocurrencies surpassed $3.1 trillion on Tuesday, according to CoinMarketCap data.