Cryptocurrencies could quintuple to a $ 3 trillion market by 2025 new projections from Bakkt Holdings, the digital asset finance company.
Bakkt released the estimate during an investor presentation released Monday in connection with its new plan to go public through a merger with Victory Park Capital, a special purpose vehicle. Bakkt is majority-owned by Intercontinental Exchange Inc., which also includes the New York Stock Exchange. The deal would give Bakkt an enterprise value of approximately $ 2.1 billion, according to a Press release.
The underlying assumptions behind the transaction show how bullish investors, entrepreneurs and finance managers have become in the fast-moving digital asset industry over the past year, especially after prices of Bitcoin, the largest cryptocurrency, quadrupled in 2020.
Just last week, the industry’s total market cap topped $ 1 trillion for the first time, despite the swooning in the prices of Bitcoin and other digital assets in recent days, bringing the total to around $ 931 billion, according to the website CoinGecko.
Bakkt currently operates a cryptocurrency derivatives market, including bitcoin futures. However, in March the company plans to release a new consumer application that will allow users to manage digital assets and use them for spending and peer-to-peer payments alongside cash and award miles.
“It is these changes that we are leveraging to the benefit of customers and retailers, to enter a massive market by enabling the monetization of digital assets,” Gavin Michael, former technology director of Citigroup’s global consumer bank, told a conference on Monday Investors call after a Transcript.
In the investor presentation, Bakkt estimated that its sales, net of transaction-related expenses, could increase an average of 75% per year to $ 515 million through 2025. The company is expected to generate positive cash flow through 2023.
According to a slide in the investor presentation, Bakkt operates in a “massive addressable addressable market” that was worth around $ 1.6 trillion in 2020, including $ 564 billion for the “face value” of the cryptocurrency.
By 2025, the presentation estimates the company’s total target market would grow to $ 5.1 trillion, including $ 3 trillion in cryptocurrency.
Here is the diagram from the presentation: