Bakkt Holdings is making significant changes to its business model after losing crucial partnerships with Bank of America and Webull. The decision by these financial institutions not to renew their commercial agreements with the company has led to a major restructuring. In response, Bakkt has announced a shift away from its Trust custody business and is repositioning itself as a dedicated crypto infrastructure provider. The company is also bringing in new leadership as it seeks to stabilize its operations and redefine its market position.
Earlier reports about Bakkt focused on its goal of integrating traditional financial services with digital assets by offering customer-facing crypto solutions like loyalty rewards. However, recent events highlight a strategic change, emphasizing institutional-grade crypto trading and liquidity services. This shift aligns with previous moves by Bakkt, such as its acquisition of Apex Crypto to bolster its trading capabilities. Unlike previous expansions, the current strategy involves divestments and narrowing its focus, suggesting a more concentrated effort to sustain its business.
What Led to Bakkt’s Decision?
The loss of Webull as a client has had a notable impact on Bakkt’s revenue, as Webull accounted for 74% of the company’s crypto services earnings. With this revenue stream cut off, Bakkt has opted to sell its Trust custody business and instead focus on trading and liquidity services. This restructuring is aimed at strengthening its presence in the digital asset market by concentrating on areas with potential institutional demand.
Bakkt has also entered into a strategic partnership with Distributed Technologies Research (DTR), a company specializing in stablecoin payment solutions. This collaboration reflects Bakkt’s intention to expand its role in digital asset transactions. The company believes this move will better position it for growth in institutional crypto adoption.
Leadership Changes and Financial Challenges
Alongside its strategic shift, Bakkt has appointed Akshay Naheta as co-CEO to work alongside current CEO Andy Main. The company expects Naheta’s expertise in financial markets and technology to contribute to its new direction. Addressing these changes, Main stated:
“As we move forward to a pure play crypto ecosystem player, [the divestiture] enables us to double down on our core offerings — providing institutional-grade crypto trading, liquidity, and subject to applicable regulatory approvals, payment solutions.”
Despite reporting total revenues of $1.797 billion for Q4 2024, reflecting a 737.9% year-over-year increase, Bakkt also recorded a net loss of $40.4 million. Though this loss represents an improvement compared to the previous year, it highlights the financial risks associated with the company’s restructuring. The company is also projecting revenues between $1.03 billion and $1.28 billion for the first quarter of 2025, banking on rising institutional crypto engagement.
Bakkt’s pivot to institutional services could provide long-term stability but also introduces new risks. The crypto sector remains volatile, and regulatory uncertainties could impact operations. The loss of Webull as a key client underscores the challenge of maintaining steady revenue streams while repositioning its business. Additionally, the company’s reliance on partnerships for execution makes it vulnerable to external shifts in the market.
As crypto markets evolve, Bakkt’s decision to divest its custody business and focus on trading infrastructure marks a decisive shift in strategy. While this could offer new opportunities, it remains to be seen whether the company can sustain growth without its previous retail partners. Investors and industry observers will be watching how Bakkt navigates regulatory requirements and institutional adoption in the coming months.
