US President-elect Donald Trump has made a big bet on cryptocurrencies. Now, in addition to his own crypto lending and credit platform World Liberty Financial (WLFI)The politician dreams of a cryptocurrency exchange. Trump Media and Technology Group (TMTG), the media company that owns Truth Social, is in talks to acquire cryptocurrency exchange Bakkt through a share swap.
On the back of this information, Bakkt shares rose by more than 160%, as did Trump Media shares (+16.7%).
Despite a market capitalization of $7 billion, Trump Media has not yet achieved profitability. In the third quarter, it suffered a loss of $19 million, earning only $1 million. At the same time, as of September 30, the company had about $673 million on its books.
«The only thing Trump Media is good at — is selling overvalued stock. Now they plan to use the accumulated funds to acquire an operating business that will potentially generate revenue and profit», — University of Florida finance professor Jay Ritter.
Matthew Tuttle, CEO of Tuttle Capital Management, added that the crypto market is reacting positively to the potential deal, despite the fact that the crypto space is already crowded.
Former Bakkt CEO Kellyanne Conway is now the co-chair of Trump’s inaugural committee and the wife of Intercontinental Exchange CEO Jeffrey Sprecher. A deal with Bakkt could significantly strengthen Trump’s position in the crypto industry.
There has been no official comment from Trump Media, Bakkt, or Intercontinental Exchange.
Source: Financial Times