- Bakkt Holdings has experienced a 35% drop in its share price following the loss of two major clients
- Bank of America and Webull have contributed significantly to Bakkt’s revenue streams
- Additionally, Bakkt has delayed the filing of its annual report, further impacting investor confidence
Bakkt Holdings has seen its stock price plummet by 35% after announcing that two major clients, Bank of America and Webull, will not renew their commercial agreements. These two clients have been substantial contributors to Bakkt’s revenue, with Bank of America accounting for 16% of its loyalty services revenue and Webull representing 74% of its crypto services revenue in 2023. The company has also postponed the filing of its annual report, raising further concerns among investors.
High Hopes
Bakkt was founded in 2018 by the Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, with the goal of bridging the gap between digital assets and traditional finance. Initially, it focused on providing physically settled Bitcoin futures contracts, aiming to offer institutional investors a regulated way to engage with cryptocurrency.
Over time, Bakkt expanded its services to include a digital asset marketplace, allowing users to buy, sell, and hold cryptocurrencies, as well as manage loyalty and rewards points. In 2021, Bakkt went public through a merger with a special purpose acquisition company (SPAC), but its stock performance has struggled since.
The company has since pivoted to emphasize institutional crypto services and loyalty programs, partnering with major banks and financial firms in an attempt to regain relevance in the market.
Client Loss Bodes Ill
The termination of the Bank of America and Webull partnerships marks a significant setback for Bakkt. The agreement with Bank of America is set to expire on April 22, 2025, while the contract with Webull will conclude on June 14, 2025, and the loss of these clients is expected to have a substantial impact on Bakkt’s financial performance, given their considerable contributions to the company’s revenue streams.
Compounding the issue, Bakkt has announced a delay in filing its annual report for the fiscal year ending December 31, 2024. The company cited the need for additional time to complete its consolidated financial statements and finalize supporting documentation for the independent audit. Bakkt plans to file the report within the fifteen-day extension period allowed by regulatory guidelines.
Investors have reacted sharply to these developments, leading to a significant drop in Bakkt’s stock price. The loss of major clients and the delay in financial reporting have raised concerns about the company’s operational stability and future prospects. As the digital asset industry continues to evolve, Bakkt’s ability to navigate these challenges and secure new partnerships will be crucial for its long-term success.
