Amidst the whirlwind of recent market events, Bakkt Holdings, a renowned digital asset platform, is shifting its focus back to its crypto custody solutions. This strategic pivot is primarily driven by the rising demand and interest from clients in the cryptocurrency space.
Rekindling the Emphasis on Crypto Custody
Before its public debut in October 2021, Bakkt Holdings had always considered its crypto custody services as a crucial part of its business model. By May 2020, the firm had successfully extended its institutional custody services to over 70 clients and formed strategic alliances with leading financial institutions. In collaboration with insurance broker Marsh, Bakkt further bolstered its custody solution by providing customers with an insurance coverage exceeding $500 million, supplementing the existing $125 million coverage.
However, post its public listing, Bakkt shifted its attention to retail payments due to several internal business and managerial modifications. The company’s re-engagement with its custody services comes after its acquisition of Apex, a crypto brokerage service provider.
Expanding Client Base and Enhanced Offerings
The digital asset platform has been successful in onboarding new clients to Bakkt Custody and is in advanced talks with a diverse range of prospects. This has resulted in a ten-fold increase in Bakkt’s qualified sales opportunities, while also ensuring stable recurring fees from its custody platform. With an eye on the future, Bakkt plans to roll out additional features like yield-generating opportunities, including institutional staking. The platform also intends to incorporate new blockchain networks and lay the groundwork for hot wallets.
Collaboration with Fireblocks
In tune with its renewed focus on custody, Bakkt has entered into a comprehensive partnership with Fireblocks, a firm specializing in institutional digital asset custody. This collaboration will allow Bakkt’s clients to maintain control of their private keys with the Fireblocks Off-Exchange solution, while Fireblocks Off-Exchange customers will have access to Bakkt’s Disaster Recovery Services.
Bakkt’s Q2 earnings report reveals a 60% year-over-year increase in net revenue, amounting to $13.6 million, and a 13% reduction in net loss from the same period last year, bringing it down to $27.6 million.
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