Digital asset platform Bakkt Holdings is refocusing on its cryptocurrency custody solutions due to recent market events and increased client interest.
In a Q2 earnings report, Bakkt touted its “compliant and trusted” custody platform, citing the current need for multi-custodian access and self-custodial functionality due to clients’ difficulty in storing digital assets safely.
Bakkt Renews Focus on Crypto Custody
Bakkt Custody was a core part of the firm’s business before its public listing in October 2021. By May 2020, the company had expanded its institutional custody solution to serve over 70 clients and struck several partnerships with major financial institutions.
The platform also partnered with insurance broker Marsh to offer customers coverage of more than $500 million in addition to the $125 million already in place at the custody solution.
However, Bakkt shifted its focus to retail payments following several business and management changes after it went public. The company’s renewed push into custody comes months after it acquired crypto brokerage service provider Apex.
The digital asset platform has signed new clients to Bakkt Custody and is engaged in late-stage negotiations with multiple prospects across broad client verticals. Bakkt’s qualified sales opportunities have increased by ten times, and the custody platform generates stable recurring fees.
With time, Bakkt intends to introduce additional features like yield-generating opportunities, including institutional staking. The custody platform would also add new blockchain networks and create a foundation for hot wallets.
Bakkt Taps Fireblocks
In line with the renewed focus on custody, Bakkt entered a multi-faceted collaboration with institutional digital asset custody firm Fireblocks. Through the partnership, Bakkt’s clients will maintain control of their private keys with the Fireblocks Off-Exchange solution. On the other hand, Fireblocks Off-Exchange customers will gain access to Bakkt’s Disaster Recovery Services.
“We have integrated Fireblocks’ battle-tested custody technology to fortify our custody offerings, leveraging their new-to-market self-hosted keys product that enables us to control and manage all MPC key shares across multiple services in our data centers and cloud. We will continue to work closely with Fireblocks to jointly deliver additional capabilities to the market,” the firm said.
Meanwhile, Bakkt generated net revenue of $13.6 million in Q2, indicating a 60% increase year over year, and trimmed its net loss by 13% from the same period last year to $27.6 million.
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