Water Tower Hour Recap: Bakkt Discusses How SEC Approvals Likely Accelerate Institutional Demand
Founded in 2018, Bakkt builds solutions that enable its clients to grow with the crypto economy. Through institutional-grade custody, trading, and on-ramp capabilities, its clients leverage technology that is built for sustainable, long-term involvement in crypto. Bakkt Head of Institutional Solutions Ray Kamrath joined WTR’s Jesse Redmond and Dr. John Roy to discuss the company’s institutional crypto business, what the recent SEC Bitcoin ETF approval means, and what might be ahead for Bakkt and the crypto market. Those interested can listen to this podcast on Apple Podcasts, Google Podcasts, Spotify, or on our website. Links accessible in our full report. Kamrath highlighted Bakkt’s strong institutional background and differentiated capabilities. With a fulsome set of crypto licenses in hand, which only a few companies have, Bakkt has been able to build an industrialstrength, reliable, and secure crypto custody platform. This platform forms the foundation of institutionally focused, comprehensive crypto solutions, which include trading, settlement, and clearing. Kamrath also discussed the approvals of a number of Bitcoin ETFs by the SEC. The actions drove the price of Bitcoin up initially, but Kamrath sees the current price movements as positioning by large players as new entrants start to work their way into the market. Kamrath sees this as a watershed moment for the US crypto industry. He believes this likely foreshadows increased institutional interest in crypto and more ETFs by other firms and for other coins, like Ethereum. Bakkt is positioned well to benefit from the improving sentiment and increased activity in the crypto markets. Overall, Bitcoin has moved from the $22,000 level a year ago to the $42,000 level today. Interest in crypto has accelerated since the SEC actions, but more regulatory clarity would be helpful and Kamrath expects that. In our net revenue 4Q23 model, we estimate an EPS loss of $0.19 on net revenue of $16.5 million. For FY24, we are modeling an EPS loss of $0.57 on net revenue of $84.4 million. This is the second podcast held with Bakkt. The September 2023 podcast with Bakkt Chief Product Officer, Crypto Dan O’Prey is accessible in our full report.
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