New York Stock Exchange owner ICE started leaning into digital assets long before most incumbent exchanges when it launched Bakkt. Finding product-market fit has been a long and winding road, all the harder because it’s a listed company. In 2022 it paid $200 million to acquire Apex Crypto, a B2B2C venture that provides white labelled crypto trading services. Now the company is doubling down on this business, announcing a collaboration with stablecoin payments firm Distributed Technologies Research (DTR), whose CEO and co-founder Akshay Naheta becomes co-CEO of Bakkt.
Naheta’s claim to fame is as a rising star at SoftBank where he was a Managing Partner and responsible for investments in ARM and Nvidia, before founding Distributed Technologies Research. DTR launched its API driven B2B payment solutions three months ago. While at Softbank, Naheta also previously sat on Bakkt’s board.
Although Bakkt continues to make losses, it has paired them significantly, with a Q4 2024 operating loss of $11.7 million, down from $78.5 million the previous year.
However, it also announced some bad news. In particular, Webull accounted for 74% of its crypto business in 2024 and plans to bring crypto services in-house in the second half. Additionally, Bank of America is moving elsewhere and represents 16% of the loyalty business.
Bakkt’s winding road
After starting by offering spot Bitcoin futures, the company pivoted to the vision of combining crypto in the same mobile app as loyalty points, with the points potentially being traded. This inspired the acquisition of loyalty firm Bridge2 Solutions for close to $300 million.
Bakkt launched the consumer app in 2021 but shuttered it after two years, although it kept hold of the Bridge 2 business that provides conventional loyalty and reward services to large corporates like Bank of America. Now Bakkt is looking to offload that business. There’s a reasonable chance it’s loyalty vision will eventually be achieved, it was simply too early.
Since 2019 Bakkt has provided custody services and acquired a New York Trust charter. That business is being transferred to ICE for $1.5 million. The interesting question is what does ICE plan to do with it?
Apart from the B2B2C crypto business, last year the company launched BakktX, an ECN crypto trading business targeting institutions.
Taking advantage of stablecoin tailwinds?
Hence, the planned collaboration on stablecoins is the latest pivot by adding payment services to crypto services. Given the recent acquisitions of Bridge by Stripe and Iron by MoonPay, the stablecoin infrastructure sector is red hot at the moment.
With ICE reportedly looking to offload Bakkt (Trump Media were reportedly in talks) and Naheta becoming co-CEO, one potential strategy is for Distributed Technologies Research to merge with Bakkt to gain a listing. But we’re just speculating. Judging by the stock price, which is down 30% this week, the market isn’t that excited about its prospects.
