On November 15th, crypto firm Bakkt made an announcement that it was switching its primary business to digital asset custody once more and also added support for six new tokens.
In addition to Bitcoin and Ether, Bakkt will now also provide custodial support to Dogecoin, Ethereum Classic, USD Coin, Litecoin, Bitcoin Cash and Shiba Inu.
Custody service
The company also stated that it would add custody services for more tokens in early 2024. Custody services essentially focus on protecting cryptographic keys.
These are required to access and transfer crypto assets. Custodians use a number of security measures for protecting assets and Bakkt does the same.
These measures include use of multisignature technology that require several approvals before granting access and also cold storage of crypto tokens.
The announcement from Bakkt came after it published its quarterly earnings report a day earlier on November 14th.
In the report, the company disclosed an adjusted $21.6 million EBITDA loss, which is a year-over-year decrease of 30%, because of a reduction in benefits and compensation.
The report also revealed that after acquiring Apex Capital back in April of this year, Bakkt had seen its crypto revenue rise in the third quarter to $91.8 million.
The partnerships
The quarter saw the company generate total revenue of $204.8 million. As far as the total number of assets in custody is concerned, they declined 28% as compared to last year to reach $505.7 million.
Bakkt is also entering into different partnerships in order to boost its crypto custody arm. The quarterly report of the company also shed light on these partnerships.
EDX Markets is a crypto exchange backed by Wall Street and Bakkt will offer custodial and clearing services, after serving as a backup qualified custodian initially.
Some of the new clients that Bakkt has acquired for custodial services include a crypto consulting firm LeboBTC that serves institutional investors and Bitcoin platform Unchained.
The expansion
The chief executive of Bakkt, Gavin Michael, said that the events that happened in the last year have made it clear why it is necessary to have qualified crypto custody.
Bakkt has also decided to expand its custody services because it wants to target business-to-business clients.
The company announced back in February that its consumer-facing app, which had been introduced back in 2021, would be sunset because it plans on shifting focus towards institutions during the crypto winter.
There are a number of traditional financial institutions that are also delving into the world of digital assets custody.
The United States’ oldest bank, BNY Mellon, rolled out a digital custody platform last year for safeguarding Bitcoin and Ether holdings of selected clients.
Likewise, the third-largest bank in Germany, DZ Bank, also launched crypto custody services for their institutional clients earlier this month.