Bakkt Suffers Major Set Back as Bank Partners Drop Platform

A growth strategy that relies heavily on strategic partnerships can be derailed when those partnerships come to a close.

That is happening in real-time to Bakkt Holdings, the digital asset and payments platform, which on Monday (March 17) suffered a significant blow when Bank of America (BofA) and Webull announced they would not be renewing their commercial agreements with the company.

The loss of Bank of America, which, per a Form 8-K filed with the Securities and Exchange Commission (SEC), accounted for 16% of Bakkt’s loyalty services revenue in 2023 as well as 17% in the most recent 9 months ended 2024; and Webull, which represented a staggering 74% of Bakkt’s crypto services revenue, casts a shadow over the company’s business model as it struggles to find stability in a highly competitive digital payments landscape.

Majority owned by Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange (NYSE), Bakkt’s mission is to connect the digital economy by providing a platform that integrates cryptocurrency trading, custody services and loyalty programs.

Bakkt has also announced a delay in its previously announced most recent full year and quarterly earnings conference call, primarily due to the need for additional time to complete the presentation of its consolidated financial statements and finalize supporting documentation for its independent audit.

The company’s share price has plummeted by over 35% as of reporting.

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Bakkt initially focused on institutional bitcoin futures trading before shifting toward consumer and business payment solutions, including crypto custody and loyalty program integrations.

But after Monday’s news, the business is now under immense pressure to either find new partners quickly or pivot its operating model entirely as the concentration risk due to its heavy reliance on a few large clients now appears to be its Achilles’ heel. 

Per the SEC filing, Bank of America’s loyalty services agreement with Bakkt is set to expire on April 22, though the bank has required the company to maintain services for up to 12 additional months to allow for a transition period. BofA’s decision follows a broader trend among traditional financial institutions reassessing their crypto and digital asset strategies amid regulatory uncertainties and shifting consumer demand.

The potentially more damaging loss, however, comes from Webull, a popular trading platform that has been Bakkt’s largest crypto partner. Webull’s exit, set for June 14, directly threatens Bakkt’s crypto services revenue stream, which depended on Webull for nearly three-quarters of its income in 2023 and 2024.

The terminations create material revenue uncertainty for Bakkt at a time when the company is already struggling to scale its crypto segment and loyalty business model.

Bakkt, which went public via a SPAC merger in 2021, has seen its share price decline more than 90% from its post-merger highs, reflecting continued skepticism over its growth prospects.

President Donald Trump’s Trump Media & Technology (TMTG) was reportedly in advanced talks to buy Bakkt in November, but those talks stalled out. The company also went through a restructuring during 2024. In February 2024, the company had said in an SEC filing that it might not be able to continue as a “going concern.”

See also: OCC Says Banks Can Hold Crypto, but Should They?

As Bakkt stumbles, the institutional crypto landscape is warming up and competition becoming more fierce as finTech companies, including Visa, PayPal, Revolut and Stripe, are exploring stablecoin integrations.

Last month, BofA CEO Brian Moynihan said in an interview that the bank would “go into” stablecoins if regulation were passed in the U.S., and regulatory compliance remains a key concern for financial stakeholders. The SEC on Monday said that the agency is reconsidering its proposed rule that would extend investment advisers’ custodial requirements to crypto.

The PYMNTS Intelligence report “Blockchain’s Benefits for Regulated Industries” found that blockchain technology has numerous potential benefits to serve the unique needs of regulated industries, including finance.

“As more banks integrate blockchain capabilities, customers will have greater choice in transferring value,” FV Bank CEO Miles Paschini told PYMNTS this month. “We’re blazing the trail for a future where blockchain is just another payment rail.”

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