Bakkt, The Intercontinental Exchange (ICE) backed digital currency custodian and financial instrument provider is looking to become a publicly-traded company.
According to individuals who are familiar with the matter, Bakkt is in advanced talks to go public through a merger with blank-check firm VPC Impact Acquisition Holdings ($VIH) and is expected to be valued at around $2 billion once the merger is complete.
What is a blank check company?
A blank-check company, also known as a special purpose acquisition company (SPAC), is an enterprise that exists for the sole purpose of merging with another company. SPACs are typically publicly traded, so when they do merge with another company, the company that they acquire or that acquires the SPAC becomes publicly traded.
In 2020, SPACs became an extremely popular way for companies to go public. It saved many of them the trouble of having to go through the IPO process, while still accomplishing the same end goal of becoming publicly traded on a US stock exchange.
The perfect storm
In 2020, Bakkt raised $300 million in its Series B investment round, and notable Bakkt investors include ICE, Galaxy Digital, Boston Consulting Group, CMT Digital Ventures, and Pantera Capital. With a valuation of $2 billion, early investors in Bakkt will see significant gains once Bakkt becomes publicly traded and they cash out.
It is always good to see a digital currency service provider advance the industry in any way shape or form, even if that means they are becoming publicly traded so they can collect US dollars.
Bakkt’s going public announcement, or rather, rumor, comes at a very interesting time in the blockchain, digital currency, and finance sectors. Not only have digital currencies become wildly popular within the last few months, but SPACs have been prospering as well. Bakkt announcing that they are looking to go public via a SPAC seems like the perfect combination of buzz-words in today’s economic environment. However, both the digital currency and SPAC bubble show no signs of slowing down at the moment.
As of press time, $VIH is up 51.3% on the day and is trading at $15.76; yesterday (January 7th), $VIH was trading at 10.42 at the end of the regular trading session.
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