From Setbacks to Strategy: Bakkt’s New Leadership and Crypto-Focused Future

Bakkt Holdings, a well-known crypto custody and trading firm, is making bold moves to reshape its future. On March 19, the company announced that Akshay Naheta, founder of Distributed Technologies Research (DTR), will step in as co-CEO alongside current CEO Andy Main. Naheta, who has a strong background from his executive roles at investment giant SoftBank Group and his work at DTR, is expected to bring fresh energy and expertise to Bakkt’s evolving vision.

Bakkt will agree with DTR to integrate its stablecoin-based payment infrastructure with Bakkt’s crypto trading and brokerage technology as part of this leadership shift. This partnership, subject to regulatory approval, aims to unlock new revenue streams and improve efficiency in cross-border payments, one of crypto’s most promising use cases.

Refocusing After Losing Key Clients

This strategic pivot comes after a tough setback for Bakkt. Just days earlier, the firm disclosed that its two major clients, Bank of America and trading platform Webull, won’t be renewing their contracts when they expire in April and June, respectively. The numbers highlight the impact Bank of America had on around 16% of Bakkt’s loyalty services revenue across 2023 and 2024. Webull’s departure hits even harder, representing 74% of Bakkt’s crypto revenue during the same period.

This news triggered a sharp drop in Bakkt’s stock price, with shares falling over 27% on March 18, closing at $9.33. Despite this blow, Bakkt is acting quickly to refocus its efforts where they matter most.

Exiting Loyalty Business and Selling Custody Arm

Focus more on its core crypto business, Bakkt revealed in its 2024 annual report that it is weighing the sale or shutdown of its loyalty services business, which presently enables customers to offer travel and merchandise rewards. Also, the company agreed to sell its cryptocurrency custody business, Bakkt Trust, to its parent company, Intercontinental Exchange, for $1.5 million.

The sale is expected to lower operating costs by $3.8 million every year and invest around $3 million in reinvestment in the cryptocurrency business segment. Bakkt assures that it will continue to offer custody services through trusted external custody partners. These strategic moves mirror Baktt’s dedication toward the core crypto business in the evolving crypto market.

Strong Financial Growth Amid Losses

Despite recent losses, Bakkt’s finances have remained solid. The company recorded $3.49 billion in total revenue for 2024, an increase of 350% compared to the same quarter in the previous year. In the meantime, its net loss for the year has been cut in half to $103.4 million. The fourth quarter was especially robust, with revenue more than seven times higher at $1.8 billion and the net loss coming down to $40.4 million.

In the future, Bakkt is estimating Q1 2025 revenues between $1.03 billion and $1.28 billion, an increase of nearly 50% over Q1 2024. While its shares (BKKT) finished the day flat at $9.31 on March 19 and are down close to 62.5% year to date, Bakkt’s decision to shift its strategy shows that it’s not giving up on its crypto ambitions.