Announcements Highlight Progress in International Markets and Custody
On November 9, Bakkt announced the expansion of its international footprint and custody client base. Key to its international efforts is expectations to be live with crypto capabilities across new Latin American, European, and Asian markets by year-end. CEO Gavin Michael said the company was “working efficiently to expand into international regions with more regulatory clarity and sizeable addressable markets.” Specifically, Bakkt is initially launching in three geographies: (1) Latin America: Bakkt and long-standing client Hapi, a stock trading platform, recently furthered their Latin American crypto trading capabilities, expanding into Mexico and Argentina, and expect to go live in Brazil by the end of 2023; (2) Europe: Bakkt and Hapi also expect to launch in Spain by the end of 2023. In addition, Bakkt will provide crypto trading and custody services in the UK and EU to crypto app 3.0verse, planning to launch by year-end; and (3) Asia: Bakkt will partner with 3.0verse throughout Asia, including Hong Kong and Singapore. Regulatory efforts outside the US are clearer. In February, WTR held a fireside chat with Bakkt General Counsel and Secretary Marc D’Annunzio about the evolving regulatory environment. D’Annunzio highlighted that even back then, the US Congress was evaluating what it needed to do, and it was trying to figure out if it needs to grant authority to specific agencies to ensure appropriate regulation. D’Annunzio went on to comment that there are bipartisan talks around stablecoins and trading platforms and consumer protection, and that Bakkt has been a part of the conversation. As the US works through its legislation, crypto is progressing outside the US, and Bakkt is going to be a player in international markets. In addition to international expansion, Bakkt continues to expand with institutionally-backed clients domestically. Bakkt and EDX Markets, a digital asset marketplace for crypto-native firms and large financial institutions, have preliminarily agreed that Bakkt will join EDX’s clearing house and custodial network initially serving as a back-up qualified custodian. Importantly, the company noted that as its business is maturing, its revenue mix is also evolving, with an increasing share coming from subscription-based annual recurring revenue. This is key to helping provide stability to the business, reducing its reliance on market volumes. This provides a strong benefit during times of uncertainty in the crypto markets, which we have recently seen negatively affect other companies. We will be hosting a fireside chat with CEO Gavin Michael and CFO Karen Alexander on Thursday, November 16, 2023, at 1:00 pm ET. The registration link is accessible in our full report below.
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