Bakkt Does Not Have Enough Cash to Last the Next 12 Months

Bakkt said that its cash and restricted cash are not enough to allow it to continue operations for the course of the next twelve months. 

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Bakkt, a leading crypto firm backed by the Intercontinental Exchange (ICE), an American firm operating global financial exchanges and clearing houses, has recently said that it does not have enough cash to continue operations for the next 12 months. 

As reported earlier by TheCoinRise, the president and founding executive of the digital assets and Bitcoin futures trading platform, Adam White, resigned in 2021 after serving three years at the company listed on the New York Stock Exchange (NYSE). 

Bakkt Nears Bankruptcy

Bakkt, previously touted as the company that would save Bitcoin (BTC), filed an amendment to its quarterly report with the United States Securities and Exchange Commission (SEC) with one section on risk factors stating that it “may not be able to continue as a going concern.”

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It is important to note that Bakkt was created in 2018 amid a lot of hype about the company being backed by ICE, which owns the NYSE. It was thought by the digital asset sector that the company would open the door for institutional investors in the industry.

Crypto Market Surge 

While the price of Bitcoin and altcoins has gone up significantly over the past couple of months in anticipation of the approval of the eleven spot Bitcoin exchange-traded funds (ETFs) by the SEC, Bitcoin investor “juthica” asked her 16,000 X followers how Bakkt managed to fumble the ball. 

Back in November 2022, the company released its earnings and operational report for the third quarter, announcing that its digital asset conversion volume of $182 million increased up to 73% year-over-year

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Bakkt Unable to Continue Operations

Bakkt stated in the filing that it fears that its cash and restricted cash are not enough to allow it to continue operations for the course of the next twelve months. 

“There is significant uncertainty associated with our expansion to new markets and the growth of our revenue base given the rapidly evolving environment associated with crypto assets,” said the company. 

Generating Sustainable Profit

The company said that it has not been able to generate sustainable operating profit and sufficient cash flows, noting that its future success will depend on its ability to raise capital. 

“We cannot conclude it is probable we will be able to increase revenues substantially beyond levels that we have attained in the past in order to generate sustainable operating profit and sufficient cash flows to continue doing business without raising additional capital in the near future,” Bakkt said. 

Bakkt will issue its registered securities in the public markets to “fund our long-term vision” and raise funds for operations.

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