Bakkt published the estimate as part of an investor presentation released Monday in connection with its new plan to go public via a merger with Victory Park Capital, a special-purpose acquisition company. Bakkt is majority-owned by Intercontinental Exchange Inc., which also owns the New York Stock Exchange. The deal would give Bakkt an enterprise value of about $2.1 billion, according to a press release.
Bakkt currently runs 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 spending and peer-to-peer payments alongside cash and rewards miles.
"It’s these shifts that we are leveraging for the benefit of both customer and merchants, truly unlocking a massive market by empowering the monetization of digital assets," Gavin Michael, former head of technology for Citigroup's global consumer bank, told investors Monday on a conference call, according to a transcript.
In the investor presentation, Bakkt estimated its revenue, net of transaction-related expenses, could grow by an average 75% per year to $515 million by 2025. The company is expected to turn cash-flow positive by 2023.
According to one slide in the investor presentation, Bakkt operates in a "massive serviceable addressable market" that was worth about $1.6 trillion in 2020, including $564 billion for the "notional value" of cryptocurrency.
By 2025, the presentation estimates, the company's overall target market would increase to $5.1 trillion, including $3 trillion of cryptocurrency.
Here's the diagram from the presentation: