Bakkt Refocuses on Crypto Custody in Q2 Profits

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Last Updated on August 11, 2023 by Bitfinsider

The company highlighted its reinvigorated push into crypto custody in its second-quarter earnings report on Thursday, a business that served as the company’s cornerstone prior to its public offering on the New York Stock Exchange. In 2020, the company garnered headlines for its Bakkt Warehouse, which provided custody clients with $125 million in insurance, as well as its business ties with bitcoin bull Paul Tudor Jones.

Following a series of business and management changes, the company moved its focus to a retail payments app, and then to loyalty and incentives after acquiring Bridge2 Solutions. Following its acquisition of crypto brokerage service provider Apex, the company’s earnings note that “recent market events have highlighted the difficulty in storing digital assets safely, as well as the need for multi-custodian access and secure self-custodial functionality.”

The firm stated that it is growing its custodial customer base as a result of “a flight to quality with a strong increase in inbound client interest.”

“We have successfully signed new custody clients and are engaged in late-stage negotiations with multiple prospects across broad client verticals,” the company said.

According to the organisation, qualified sales prospects are up 10x in the first half of the year compared to the second half of 2022.

Bakkt’s operations include back-end infrastructure for loyalty and rewards points, as well as crypto and trading solutions through its Bakkt Crypto Solutions division. Companies such as Webull are clients of the latter unit. Bakkt reported $335.3 million in crypto services revenue, which reflects crypto purchases made on behalf of its clients. These purchases are tagged at face value and reported as revenue. Operating costs exceeded $398 million.

Bakkt shares plummeted after the earnings report and are now trading at $1.37 a share.

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