Bakkt

In August 2018, Intercontinental Exchange announced it was forming a new company Bakkt,[8] which was intended to leverage Microsoft online servers to manage digital assets. Bakkt was said to be working with Boston Consulting Group (BCG), Microsoft, Starbucks, and others to create a software platform. The Bakkt ecosystem is expected to include federally regulated markets and warehousing along with merchant and consumer applications. Its first use cases will be for trading and conversion of Bitcoin (BTC) versus fiat currencies. Kelly Loeffler served as Bakkt's CEO until her appointment to the United States Senate.[9]

As an initial component of the Bakkt offering, Intercontinental Exchange's U.S.-based futures exchange and clearing house plan to launch a one-day physically delivered BTC contract along with physical warehousing in 2019, subject to CFTC review and approval, which was delayed.[10] These regulated venues will establish new protocols for managing the specific security and settlement requirements of digital currencies. In addition, the clearing house plans to create a separate guarantee fund that will be funded by Bakkt.

In January 2019, Bakkt announced that it had entered into an agreement to acquire certain assets of Rosenthal Collins Group (RCG), to close in February.[11] In April 2019, Bakkt announced that it had acquired Digital Asset Custody Company (DACC). Terms of the transaction have not been disclosed.[12] In September 2019 the exchange began trading of bitcoin futures.[13] In February 2020, ICE announced that it agreed to acquire Bridge2 Solutions, a leading provider of loyalty solutions for merchants and consumers. Following the completion of the transaction, Bakkt plans to acquire Bridge2 Solutions from ICE using proceeds from Bakkt's Series B round of funding.[14]

In September 2020, Bakkt announced a new all-time high for trade volume in physically delivered Bitcoin futures contracts. During the September 15th session, this figure amounted to 15,955 BTC (more than $200 million at the time of announcement).[15]

In January 2021, Bakkt announced that it would become a publicly traded company via a merger with VPC Impact Acquisition Holdings, a special purpose acquisition company sponsored by Victory Park Capital (“VPC”). The newly combined company will be renamed Bakkt Holdings, Inc. and will be listed on the New York Stock Exchange, where the business combination between Bakkt and VIH values the combined company at an enterprise value of approximately $2.1 billion.[16] Intercontinental Exchange will retain a 65% economic interest.[17]

In October 2021, Bakkt announced it had completed its merger with VPC Impact Acquisition Holdings (NASDAQ: VIH), and will begin trading as a public company on the New York Stock Exchange on Monday, October 18, under the ticker “BKKT”.[18] Intercontinental Exchange (ICE) maintains an approximately 68% economic interest and a minority voting interest in the combined company. The investment will be reclassified as an equity method investment of ICE and will therefore not be consolidated within ICE’s financial statements. The earnings of equity method investments are excluded from ICE’s adjusted non-GAAP results.

Under Bakkt’s B2B2C business model, the company plans to grow its user base by integrating its platform with the platforms and channels of strategic business partners.[19]

In October 2021, Mastercard (NYSE: MA) and Bakkt announced a multifaceted partnership to make it easier for merchants, banks and fintechs in the U.S. to embrace and offer a broad set of cryptocurrency solutions and services. Through the Mastercard network and Bakkt’s trusted digital asset platform, Mastercard partners will be able to offer cryptocurrency solutions. These include the ability for consumers to buy, sell and hold digital assets through custodial wallets powered by the Bakkt platform and streamlined issuance of branded crypto debit and credit cards.[20]

Bakkt also announced that it would enter into a strategic relationship with Fiserv, Inc. (NASDAQ: FISV), a leading global provider of payments and financial services technology solutions. The combination of expansive capabilities from Fiserv, including the ability to move funds into and out of mobile wallets, with Bakkt’s digital asset platform will enable practical uses of crypto and emerging asset classes.[21]