Cryptocurrencies could grow fivefold by 2025, generating a $ 3 trillion market, according to new projections from Bakkt Holdings, an institutional digital asset exchange. The company is preparing to debut on the stock exchange thanks to a merger with SPAC Victory Park Capital.
Institutions prove bullish on the crypto market
Bakkt released the estimate as part of an investor presentation released this week in connection with its new public listing plan via a merger with Victory Park Capital (VPC).
VPC is a so-called "special purpose acquisition company," or SPAC, or a company whose sole objective is to acquire or merge with another company, allowing the latter to be listed on the stock exchange without having to go through the long and costly procedure of an initial public offering.
Bakkt is controlled by Intercontinental Exchange Inc., which also owns the New York Stock Exchange. The deal would give Bakkt a company value of approximately $ 2,1 billion, according to a press release.
The projections behind the transaction show how investors, entrepreneurs and financial executives have turned bullish over the past year in the fast-paced digital asset industry, especially after prices for bitcoin (quotation BTC), the largest cryptocurrency in the world, quadrupled in 2020.
In the past week alone, the industry's total market capitalization exceeded $ 1 trillion for the first time, although a drop in the prices of bitcoin and other digital assets in recent days has reduced the total value to about $ 931 billion, according to the CoinGecko site.
The merger of Bakkt with VPC
Bakkt currently operates a market for cryptocurrency derivatives, including bitcoin futures, but in March the company plans to release a new consumer application that could allow users to manage digital assets and use them for peer-to-peer shopping and payments. -peer along with cash and award miles.
"It is these changes that we are leveraging to the benefit of both customers and merchants by truly unlocking a huge market by enabling the monetization of digital assets," Gavin Michael, former head of technology for global consumer bank, told investors at the conference. Citigroup.
In the presentation to investors, Bakkt estimated that its revenue, net of transaction-related expenses, could grow an average of 75% annually to $ 515 million by 2025.
The company is expected to become cash flow positive by 2023. According to a slide in the investor presentation, Bakkt operates in a "huge usable addressable market" that was worth about $ 1,6 trillion in 2020, including $ 564 billion for the "notional value" of the cryptocurrency. By 2025, the company's overall target market would increase to $ 5,1 trillion, including $ 3 trillion of cryptocurrency, according to estimates.
