What happened

Shares of Bakkt Holdings (BKKT -8.33%) plummeted 34% on Thursday after the cryptocurrency platform filed a registration statement for a massive stock sale. 

So what 

In a filing with the Securities and Exchange Commission (SEC) on Wednesday, Bakkt announced that early investors would be free to sell more than 230 million shares of its stock in the public markets. Prior to the issuance and sale of these shares, Bakkt had only slightly more than 57 million shares outstanding. 

A downward-sloping stock chart.

Bakkt Holdings shed more than one-third of its value on Thursday. Image source: Getty Images.

Judging by the stock's plunge today, many of these investors decided to immediately sell their shares. Other shareholders who were concerned by these sales likely joined these sellers, thereby perpetuating the sharp decline in Bakkt's stock price.

Now what 

Bakkt went public via a special acquisition company (SPAC) merger in October. The digital asset marketplace counts Intercontinental Exchange (ICE 0.33%), owner of the New York Stock Exchange, as its largest shareholder. 

Shortly after its debut on the public markets, Bakkt's shares surged after it announced partnerships with Mastercard (MA 1.72%) and Fiserv (FI 0.52%). Bakkt is working with these financial services giants to provide their customers with a wide array of digital asset services, including the ability to more easily trade and transfer cryptocurrencies.

Yet after soaring as high as $50.80 per share in early November, Bakkt's stock price has now declined by over 80%. Amid the excitement surrounding its market debut and subsequent deals with payment industry titans, Bakkt's shares appear to have simply risen too far, too fast -- and investors are now resetting their expectations.