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Bakkt Refocuses on Custody Services Amid Quarterly Losses

Key Insights: 

  • Bakkt enhances crypto custody, adding DOGE, SHIB, and BCH; response to 28% asset drop.
  • Despite a $21.6M loss, Bakkt grows with new crypto offerings, targeting institutional clients.
  • The company’s strategic pivot to custody services aligns with broader financial industry trends.

Bakkt, a prominent name in the cryptocurrency sector, is intensifying its focus on digital asset custody services. This shift comes after its recent quarterly earnings report, highlighting a significant 28% drop in assets under custody. Bakkt’s adjusted EBITDA loss for the quarter was reported at $21.6 million, a 30% decrease compared to the previous year. This decline is attributed primarily to a reduction in compensation and benefits.

Expanding Custodial Services

Bakkt’s decision to expand its custodial services responds to the evolving cryptocurrency market demands. Starting from its existing support for Bitcoin and Ether, Bakkt plans to extend its custody to include an array of digital currencies such as Bitcoin Cash (BCH), Dogecoin, Ethereum Classic, Litecoin, Shiba Inu, and USD Coin. The company anticipates adding more coins to this list in early 2024.

The custody of digital assets is a crucial aspect of the cryptocurrency ecosystem, focusing on protecting cryptographic keys necessary for accessing and transferring these assets. Bakkt employs various advanced security measures, including cold storage solutions and multi-signature technology, which requires multiple approvals for asset access to ensure the safety of these digital assets.

Strategic Partnerships and New Ventures

To reinforce its position in the crypto custody domain, Bakkt is actively pursuing strategic partnerships. The company has recently announced plans to offer clearing and custodial services for the Wall Street-backed crypto exchange EDX Markets. Bakkt will initially serve as a backup qualified custodian for EDX. Additionally, Bakkt has onboarded new clients for its custodial services, including the Bitcoin platform Unchained and LeboBTC, a consulting firm catering to institutional crypto investors.


Gavin Michael, CEO of Bakkt, emphasized the importance of qualified crypto custody, especially given the tumultuous events in the cryptocurrency market over the past year. This focus on institutional-grade custody services underscores Bakkt’s commitment to providing secure and reliable solutions for digital asset management.

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Financial Performance and Market Position

Despite the challenging market conditions, Bakkt reported a notable $191.8 million in crypto revenue for the third quarter of 2023, largely credited to its acquisition of Apex Crypto in April of the same year. The company’s total revenue for the quarter stood at $204.8 million. However, the total assets under custody declined, amounting to $505.7 million, a 28% decrease from the previous year.

Bakkt’s strategic shift to focus more on business-to-business clients is part of its broader plan to adapt to the current ‘crypto winter.’ This approach was signaled earlier in February when Bakkt announced the sunsetting of its consumer-facing app launched in 2021 to concentrate more on institutional clients.

Broader Industry Trends

Bakkt’s move to enhance its digital asset custody services resonates with a broader trend in the traditional financial sector. Notably, BNY Mellon, America’s oldest bank, launched a digital custody platform in 2022, offering ETH and BTC holding services to select clients. Similarly, Germany’s third-largest bank, DZ Bank, has also ventured into providing crypto custody services to institutional investors.

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Bakkt’s refocusing on digital asset custody services represents a strategic adaptation to the current market conditions and client demands. Bakkt aims to reinforce its position in digital asset custody by expanding its range of supported cryptocurrencies and forging new partnerships. This move also aligns with the growing interest of traditional financial institutions in the crypto custody space, highlighting a significant shift in the approach towards digital asset management. As the crypto industry continues to evolve, Bakkt’s emphasis on security, reliability, and institutional-grade services positions it as a key player in the digital asset custody field.

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Curtis Dye

Curtis is a cryptocurrency news and analytics author with a focus on DeFi, BLockchain, CeFi, NFTs etc. He has publication skills such as SEO optimization, Wordpress, Surfer tools and aids his viewers with insights on the volatile crypto industry.

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