The world of cryptocurrency is witnessing a significant transformation with the ascent of Donald Trump to the US presidency. In a notable development, a crypto trading firm might soon be under the ownership of the billionaire president, signaling greater involvement in digital currencies.
The Prospect of Trump Media Acquiring Bakkt
According to recent reports, Trump Media is contemplating acquiring the Bakkt cryptocurrency company, aiming to establish a strong presence in the digital asset sector. Sources close to the ongoing negotiations, who preferred anonymity, revealed to the Financial Times that Trump Media is close to finalizing this strategic acquisition. The executives at the cryptocurrency trading platform are reportedly in “advanced talks” with Trump’s business team to make this acquisition a reality.
This potential acquisition highlights President Trump’s growing interest in being a significant force in the cryptocurrency industry as he prepares to assume office. It is worth noting that prior to the US presidential election, Trump unveiled a crypto venture named World Liberty Financial, which entitled him to 75% of the platform’s net coin revenue without any liabilities.
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Market Reactions: The Surge in Trump Media and Bakkt Stocks
The announcement of the possible acquisition has generated a wave of optimism among investors, reflected in the stock market. On the day of the news release, Trump Media’s stock value soared, closing 16% higher than the previous trading day due to the anticipated purchase of the crypto exchange platform. Similarly, Bakkt’s stocks experienced a significant rise, climbing over 162% by the market’s close. Most of Bakkt’s shares are traded on the New York Stock Exchange (NYSE) under the Intercontinental Exchange (ICE).
Currently, the total market capitalization of cryptocurrencies stands at a staggering $3 trillion. Meanwhile, Trump maintains a 60% stake in Trump Media, which boasts a market cap of approximately $7.1 billion. He has no immediate plans to divest these shares.
The Strategic Timing of Trump’s Acquisition Interest
Industry analysts view Trump’s interest in acquiring the crypto trading firm as timely, given the company’s struggles to maintain financial stability. Despite showing improvement from the previous year, Bakkt has acknowledged the possibility of not continuing as a viable entity.
The firm has assured that it possesses sufficient capital to operate for at least the next 12 months. However, they cautioned that this determination might change, sparking concerns about the company’s long-term viability. Last March, the NYSE issued a warning to Bakkt about a potential delisting from the stock market due to its common stock trading below the minimum per share threshold for 30 consecutive trading days.
In conclusion, the potential acquisition of Bakkt by Trump Media underscores the increasing importance of cryptocurrency in the current economic landscape and highlights Trump’s strategic interest in expanding his business empire into digital assets.
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