Bakkt shifts focus to security services, adds support for DOGE, SHIB, other coins
Crypto firm Bakkt appears to be returning to digital asset protection as its core business, adding support for six new coins as announced on November 15.
In addition to Bitcoin (BTC) and Ether (ETH), Bakht adds support for Bitcoin Cash (BCH), Dogecoin (DOGE), Ethereum Classic (ETC), Litecoin (LTC), Shiba Inu (SHIB), and USD Coin. (USDC) The company expects to add more coins to its escrow services as early as 2024.
Digital asset protection focuses on protecting the encryption keys that are critical to accessing and transferring assets. Various security measures are employed by custodians like Bakkt to protect assets, including cold storage of coins and multi-signature technology that requires multiple access permissions.
The announcement follows Bakkt's quarterly earnings report on Nov. 14, when the company reported an adjusted EBITDA loss (non-GAAP) of $21.6 million, a 30% year-over-year decline in compensation and benefits.
According to the report, Bitcoin reached $191.8 million in the third quarter of 2023 due to its acquisition of Apex Crypto in April. During the quarter, the company generated total revenue of $204.8 million. In terms of assets under management, Bakkt reported $505.7 million, a 28% decrease compared to last year.
To strengthen its crypto-guardian arm, Bakkt is developing partnerships. According to the company's quarterly report, it plans to provide clearing and custody services to Wall Street-backed crypto exchange EDX Markets, initially serving as a backup qualified custodian. Among Bakkt's new custody services clients are Bitcoin platform Unchained and LeboBTC, a crypto advisory firm for institutional investors.
“The events of the past year have shown why qualified crypto stewardship is so important,” Bakkt CEO Gavin Michaels said in a statement.
Expanding security services is an important aspect of Bakkt's strategy to target business-to-business customers. In February, the company announced that it would sunset its consumer-facing app in 2021 to focus on institutions during the crypto winter.
Many traditional financial institutions target the protection of digital assets. In the year In 2022, BNY Mellon, the oldest bank in the United States, launched a digital custody platform to protect ETH and BTC holdings for selected customers. Germany's third largest bank, DZ Bank, started offering crypto custody to institutional investors earlier this month.
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