Benchmark Says Bakkt’s Licenses Support New Crypto-Focused Business Model

Broker Benchmark reportedly initiated coverage of Bakkt with a buy rating, saying the company’s regulatory footprint supports its efforts to “reboot” by shedding parts of its business and sharpening its focus on a “brokerage-in-a-box” for institutions, a bitcoin treasury program and a stablecoin payments network.

Bakkt’s BitLicense and money transmitter licenses in 50 states give it a key advantage, Benchmark Equity Research Analyst Mark Palmer wrote in a Monday (Sept. 8) note, according to a Monday report by CoinDesk.

Bakkt announced Aug. 11 that a leadership transition in which former Co-CEO Akshay Naheta became the company’s sole CEO “reflects the natural progression of Bakkt’s transformation into a pure-play crypto infrastructure company.”

Former Co-CEO and Director Andy Main, who became an adviser to Bakkt as part of the transition, said during the company’s quarterly earnings call that he was stepping down after helping to strategically realign Bakkt since March 2024 by, among other things, exiting noncore businesses and refocusing on crypto.

Naheta said during the call that he will build on the foundation created by this restructuring to “unlock the next phase of growth for Bakkt as a leading global crypto infrastructure platform.”

PYMNTS reported in March that Bakkt initially focused on institutional bitcoin futures trading before shifting toward consumer and business payment solutions, including crypto custody and loyalty program integrations.

However, the company suffered a major setback at that time when two partners announced they would not be renewing their commercial agreements with Bakkt.

After that news, the business was under immense pressure to either find new partners quickly or pivot its operating model entirely to reduce its heavy reliance on a few large clients.

When Bakkt announced on the following day that it was pivoting to become “a pure-play crypto infrastructure company,” Main said the divestiture of its custody business would enable it to double down on its core offerings.

During a May earnings call, Bakkt highlighted a cooperation agreement with Distributed Technologies Research (DTR) that aims to integrate DTR’s artificial intelligence and stablecoin payment infrastructure into Bakkt’s regulated trading platform.

Naheta said during the call that this integration would create “a comprehensive ecosystem designed for frictionless movement between crypto trading, AI-powered solutions and global digital payments.”