Bakkt Turns Focus Back to Digital Asset Custody, Adding Support for Six New Coins
Crypto company Bakkt appears to be refocusing on its digital asset custody as its foundational operations. With an expansion plan in place, the company intends to offer custodial support beyond Bitcoin (BTC) and Ethereum (ETH), and incorporate six new cryptocurrencies. These include Bitcoin Cash (BCH), Dogecoin (DOGE), Ethereum Classic (ETC), Litecoin (LTC), Shiba Inu (SHIB), and USD Coin (USDC).
Strengthening the Custodial Services
A firm timeline is yet to be announced, however, Bakkt aims at extending the range of coins in its custody services early in the coming year. The core focus of digital asset custody lies in the secure preservation of cryptographic keys – these are essentially the keys to the kingdom, allowing access and transfers of assets.
In order to offer top-notch security, several robust measures are implemented by custodians like Bakkt. These include cold storage of coins, and intricate multi-signature technology that demands multiplicity of approvals to gain access.
Financial Gains Amidst Adjustments
The new announcement is in the wake of Bakkt’s quarterly earnings report released on November 14. The company disclosed an adjusted EBITDA loss (non-GAAP) of $21.6 million, indicating a year-over-year decrease of 30%, largely due to a reduction in compensation and benefits.
However, it’s not all doom and gloom, as Bakkt’s quarterly report showcased an astounding crypto revenue of $191.8 million in Q3 2023, boosted significantly by the acquisition of Apex Crypto earlier in April. Overall, the company generated a healthy total revenue of $204.8 million over the quarter.
Optimizing Partnerships in Custodial Forte
As part of the strategic maneuver, Bakkt is also working on forging new partnerships. The idea is to offer clearing and custodial services for EDX Markets, a crypto exchange backed by Wall Street and initially act as a backup qualified custodian.
Add to the list of notable new clients, Bitcoin platform ‘Unchained’ and LeboBTC, a consulting firm for institutional investors are said to be utilizing Bakkt’s custody services.
“The events of 2023 have highlighted the increasing necessity for robust crypto custody”, stated Gavin Michael, CEO of Bakkt. Broadening the custody services is also critical to Bakkt’s strategy to better serve its business-to-business (B2B) clients.
Targeting traditional Financial Institutions
From Bakkt, the focus now shifts to many traditional financial institutes that are also hoping aboard the digital assets custody bandwagon. For instance, BNY Mellon, the United State’s oldest bank, had launched a digital custody platform last year allowing ETH and BTC holdings for select customers. Likewise, Germany’s third-largest bank, DZ Bank, has begun offering crypto custody to institutional investors earlier this month.
By all accounts, it seems like 2023 is poised to be an important year for the custody of digital assets.