ICE takes down $1.1 billion for stake in crypto platform Bakkt
Intercontinental Exchange (ICE) is taking a $1.1 billion write-down on its holdings of crypto platform Bakkt (BKKT), according to an SEC filing late Friday afternoon.
Atalanta-based Bakkt, which offers crypto and other digital assets to institutional investors, is taking a $1.3 to $1.4 impairment loss on goodwill in addition to $150 to $160 million on its intangible assets.
Cryptocurrencies are considered intangible assets based on generally accepted accounting principles (GAAP), which means they must be written down to the lowest price for a period of time and cannot be marked up until sold.
Bakkt was originally formed by Intercontinental Exchange back in 2018. The first use cases for their technology platform were bitcoin and other cryptocurrencies and bitcoin futures contracts.
In January 2021, Bakkt announced plans to go public through a merger with a special purpose acquisition company (SPAC) VPC Impact Acquisition Holdings. At the time, the company had an enterprise value of $2.1 billion.
ICE had a 68% economic stake in Bakkt when it listed on the New York Stock Exchange on October 15, 2021.
Shortly after, Bakkt announced a partnership with Mastercard to issue crypto debit and credit cards.
Since then, cryptocurrencies have fallen in value. Bitcoin, for example, has sold off by 66% from $61,548 to $20,636 per coin, while trading volume flagged by 18% according to crypto indexer Nomics.
During the same period, shares in ICE have fallen 30% from $138.8 to $95.40, while shares in Bakkt have fallen more than 76% from $42.52 to $2.17.
In August, Bakkt CEO Gavin Michael admitted to Yahoo Finance that companies were exploring crypto “at a slightly more conservative pace.”
The Bakkt share rose one point in after-hours trading on Friday. The ICE share is down by the same amount in the same period.
David Hollerith is a senior reporter at Yahoo Finance covering cryptocurrency and stock markets. Follow him on Twitter at @DsHollers
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