ICE writes down its investment in cryptocurrency network Bakkt by $1.1 billion

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ICE writes down its investment in cryptocurrency network Bakkt by .1 billion

According to a late Friday afternoon SEC filing, Intercontinental Exchange (ICE) is deducting $1.1 billion from its shares in the cryptocurrency platform Bakkt (BKKT).

According to generally accepted accounting principles (GAAP), cryptocurrencies are intangible assets that must be written down to their lowest price for a given period and cannot be marked up until sold.

A $1.3 to $1.4 impairment on a loss of goodwill along with $150 to $160 million on its intangible assets are being taken by Atlanta-based Bakkt, which provides institutional investors with access to cryptocurrency and other digital assets.

The Intercontinental Exchange founded Bakkt in its initial iteration back in 2018. Bitcoin and other cryptocurrencies, together with bitcoin futures contracts, were the first use cases for its technology platform.

When Bakkt commenced trading on the New York Stock Exchange on October 15, 2021, ICE owned a 68% economic interest in the company.

Bakkt announced plans to merge with a special purpose acquisition company (SPAC), VPC Impact Acquisition Holdings, in January 2021 in order to go public. The business had an enterprise value of $2.1 billion at the time.

The cooperation between Bakkt and Mastercard to issue cryptocurrency debit and credit cards was announced shortly after.

The value of cryptocurrency has since drastically decreased. According to the cryptocurrency indexer Nomics, Bitcoin has fallen by 66% from $61,548 to $20,636 per coin while trading volume has dipped by 18%.

Shares of Bakkt have dropped more than 76% from $42.52 to $2.17 over the same time period, while shares of ICE have dropped 30% from $138.8 to $95.40. Gavin Michael, CEO of Bakkt, acknowledged to Yahoo Finance in August that businesses were investigating cryptocurrency “at a bit more cautious pace.”

After-hours trading on Friday saw a point increase in Bakkt shares. The same era sees a similar decline in ICE share price.

News Summary:

  • ICE writes down its investment in cryptocurrency network Bakkt by $1.1 billion
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