Bank of America and Webull Decisions Increased Selling Pressure

In a regulatory filing dated March 17, Bakkt disclosed that two key clients would not renew their commercial agreements. Bank of America will terminate its existing agreement on April 22, while the brokerage platform Webull will end its contract on June 14.

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According to the filing, Bank of America accounted for 17% of Bakkt’s loyalty services revenue for the nine months ending September 30, 2024. Webull contributed 74% of the company’s crypto services revenue during the same period.

Shares Crash to New Lows!

Following this development, Bakkt (BKKT) shares dropped 27.28% on March 18, closing at $9.33. In after-hours trading, the shares fell an additional 2.25%, reaching $9.12.

Bakkt’s stock price has plummeted more than 96% from its all-time high of $1,063, recorded in October 2021.

Bakkt has postponed its previously announced earnings conference call twice. The latest rescheduling sets the call for March 19. These delays have added further uncertainty for investors.

Class Action Lawsuit on the Horizon!

The Law Offices of Howard G. Smith announced a potential class action lawsuit against Bakkt following the termination of agreements with Bank of America and Webull. The statement claims that the canceled agreements and the delayed earnings call led to a sharp decline in Bakkt’s stock price, “thereby injuring investors.”

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Founded by ICE (Intercontinental Exchange) in 2018, Bakkt has undergone multiple transformations in its pursuit of success, initially focusing on Bitcoin futures and crypto options but later pivoting towards crypto custody and consumer rewards. However, despite raising hundreds of millions from investors like Microsoft, Galaxy Digital, and others, the platform has faced challenges achieving profitability.

Trump’s increasing engagement with crypto is highlighted by his support for projects such as NFT collections and the launch of World Liberty Financial, a DeFi protocol. Additionally, he has expressed intentions to protect and expand the blockchain industry, including efforts to remove SEC Chairman Gary Gensler, who is often seen as skeptical of crypto.

With Trump Media and Technology Group (TMGT), which owns Truth Social, reportedly planning to acquire Bakkt, this move underscores the shifting dynamics of crypto investments and regulation, as the former president builds his stake in the sector.

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The insiders told the newspaper that the board might possibly decide to keep Bakkt’s present structure and skip a sale or complete business dissolution entirely.

News of the possible sale followed numerous high-profile purchases and takeover offers in the crypto field, including Robinhood’s acquisition of the Bitstamp exchange and Coreweave’s unsolicited approach to buying out Bitcoin miner Core Scientific.

Bakkt has suffered from inadequate market price performance. From a peak of $59.57 at the start of 2024 to almost $19 at the time of writing, the share price of the crypto corporation dropped dramatically.

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The institutional cryptocurrency company disclosed in February 2024 that it might not be able to keep its company operational since it was running low on funds. Bakkt then sought regulatory clearance to fund $150 million in capital to keep running operations.

Shortly following the application, U.S. authorities approved Bakkt’s proposal to fund itself via a $150 million securities auction to investors.

Andy Main, Bakkt’s CEO and president, said in a statement a month after the disclosed financial shortage and subsequent securities sale that the company had improved its balance sheet and was no longer at risk of closure.

Main cited Bakkt’s $780 million 2023 income as proof that business has recovered at the company. But a look at Bakkt’s financials and pricing performance reveals another.

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