Bakkt’s Bold Move Back to Custody
In a strategic pivot, Bakkt has decided to put its digital asset custody services back in the spotlight, announcing on Nov. 15 that it is adding support for six new cryptocurrencies. Yes, Bitcoin and Ether are still the main stars, but joining this flashy party are Bitcoin Cash (BCH), Dogecoin (DOGE), Ethereum Classic (ETC), Litecoin (LTC), Shiba Inu (SHIB), and USD Coin (USDC). That sounds like a cryptographic potluck!
The Importance of Digital Asset Custody
Custody services are not just a nice-to-have; they’re essential for safeguarding the precious cryptographic keys that unlock our shiny digital coins. Think of it like having a vault for your gold—but this gold is intangible, and its vault is virtually fortified. Custodians like Bakkt utilize a host of security measures including cold storage and multisignature technology. Essentially, getting access to these assets requires multiple high-fives from different parties. A little extra work, but hey, better safe than sorry!
Financials: A Mixed Bag
Bakkt’s latest quarterly report, released on Nov. 14, showed a rather colorful financial landscape. The company reported an adjusted EBITDA loss of $21.6 million, a 30% year-over-year decrease. Clearly, slashing compensation and benefits is part of that lovely mix. But it’s not all doom and gloom; Bakkt’s crypto revenue hit $191.8 million this past quarter, thanks in no small part to its April acquisition of Apex Crypto. Never underestimate the power of a good partnership!
New Partnerships and Future Plans
To bolster its custody services further, Bakkt is forming new partnerships, including one with EDX Markets to offer backup custodial services. This move seems to shout, ‘We’re serious about this!’ They’re also welcoming new clients such as Bitcoin platform Unchained and cryptocurrency consulting firm LeboBTC. And let’s be real, Gavin Michael, CEO of Bakkt, is not mincing words when he highlights the necessity of qualified crypto custody.
What This Means for the Crypto Landscape
As Bakkt shifts its focus to business-to-business clients by phasing out its consumer-facing app, it’s just an illustration of the larger market trend. Amidst the crypto winter, institutions are flexing their muscles in the custody space. After all, if big banks like BNY Mellon and DZ Bank are diving into digital custody, you can bet that the party is just getting started. So, as Bakkt prepares to add more coins to its arsenal in early 2024, it’s clear: the digital asset custody arena is heating up, and everyone wants a ticket.
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