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Digital asset platform Bakkt Holdings is redirecting its attention towards its cryptocurrency custody solutions in light of recent market developments and heightened client demand.
In its Q2 earnings report, Bakkt highlighted its “compliant and trusted” custody platform, noting the current necessity for multi-custodian access and self-custodial capabilities due to clients’ challenges in securely storing digital assets.
Bakkt Reaffirms Commitment to Crypto Custody
Bakkt Custody was a fundamental aspect of the company’s operations prior to its public listing in October 2021. By May 2020, the firm had broadened its institutional custody service to accommodate over 70 clients and established several partnerships with prominent financial institutions.
The platform also collaborated with insurance broker Marsh to provide clients with coverage exceeding $500 million, in addition to the existing $125 million already available through the custody solution.
However, Bakkt redirected its focus towards retail payments following various business and management transitions after going public. The company’s renewed emphasis on custody follows its acquisition of the crypto brokerage service provider Apex a few months ago.
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The digital asset platform has onboarded new clients to Bakkt Custody and is in advanced discussions with several potential clients across diverse sectors. Bakkt’s qualified sales opportunities have surged tenfold, and the custody platform yields consistent recurring fees.
Over time, Bakkt plans to roll out additional features such as yield-generating options, including institutional staking. The custody platform will also incorporate new blockchain networks and establish a foundation for hot wallets.
Bakkt Partners with Fireblocks
In alignment with its renewed focus on custody, Bakkt has initiated a comprehensive partnership with institutional digital asset custody firm Fireblocks. Through this collaboration, Bakkt’s clients will retain control of their private keys using the Fireblocks Off-Exchange solution. Conversely, Fireblocks Off-Exchange clients will have access to Bakkt’s Disaster Recovery Services.
“We have integrated Fireblocks’ proven custody technology to enhance our custody offerings, utilizing their newly launched self-hosted keys product that allows us to control and manage all MPC key shares across various services in our data centers and cloud. We will continue to collaborate closely with Fireblocks to jointly deliver further capabilities to the market,” the firm stated.
Meanwhile, Bakkt reported net revenue of $13.6 million in Q2, reflecting a 60% year-over-year increase, and reduced its net loss by 13% compared to the same period last year, totaling $27.6 million.
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