Bakkt Execs: Apex Crypto Acquisition ‘Fast Tracks’ Path to Profitability

The crypto marketplace seeks to expand internationally and ramp up its custody business after enduring a net loss of $45 million in the first quarter


NESPIX/Shutterstock modified by Blockworks


Crypto marketplace Bakkt posted a net loss of roughly $45 million during the first quarter, but company executives expect its latest acquisition to help its profitability. 

Bakkt closed its acquisition of Apex Crypto on April 1 and is focused on integrating the business as soon as possible, Bakkt CEO Gavin Michael said during a Wednesday webinar.   

The company has said the deal helps offer deeper liquidity, coin transfers and advanced order capabilities to customers.

“It fast tracks our ability to bring new crypto capabilities to market, as well as bolstering our path to profitability and giving us a pool of some incredibly talented employees across product engineering and operations,” Michael said. 

Bakkt Chief Financial Officer Karen Alexander said that the lower-than-expected first quarter net revenue of $13 million was driven by volume-based service revenue. She attributed this to the activity levels at its customer call center and the technology development work carried out on behalf of clients.

Alexander added that “the deal with Apex Crypto will offer a great lift to Bakkt’s revenue base going forward.” She anticipates Apex Crypto’s financial results for the remainder of 2023 to be “free cash flow breakeven” in relation to the company’s combined results.

Bakkt agreed to acquire the trading platform from Apex Fintech Solutions in November. 

Arjun Mehra, a financial analyst at advisory firm Architect Partners, said in a research note at the time that the deal would allow Bakkt to grow its crypto offering to corporate clients. 

Bakkt’s deal with Apex Crypto has opened it up to clients including Webull, Stash and, Michael said Wednesday. 

The deal closure came as the company shifted its focus to offering crypto capabilities for its partners, rather than the customers of the brands it works with. 

Mark Elliot, Bakkt’s chief of sales and marketing, told Blockworks in February the company was set to discontinue its consumer-facing app, noting that Apex Crypto doesn’t have one.  

The firm works behind the scenes to help clients create a good trading experience, which the executive noted is the model Bakkt seeks to replicate.

Coin delistings, international expansion, custody

Following the close of its deal to acquire Apex Crypto, Bakkt chose to delist 25 coins as part of its “regular coin listing review process.”

“This decision was largely based on the rapidly evolving US regulatory climate,” Alexander said, noting the SEC’s enforcement action against crypto exchange Bittrex last month. “We don’t publicly share our coin listing policy, but we have always certainly described it as taking into account a number of factors, and that includes regulatory policy, security, reliability and customer demand.” 

While delisting 25 coins “sounds like a lot,” the CFO noted, the bulk of Bakkt’s revenue is generated from the coins with a large market capitalization, such as bitcoin.

The company continues to offer bitcoin (BTC), as well as ether (ETH), litecoin (LTC), cardano (ADA), solana (SOL), bitcoin cash (BCH), dogecoin (DOGE), ethereum classic (ETC), polygon (MATIC), shiba inu (SHIB) and USD Coin (USDC). 

Amid the regulatory certainty in the US, Michael stated that Bakkt has plans to expand its presence in additional markets. These markets include the UK, parts of the EU, and Southeast Asia, due to progress being made in terms of crypto legislation in those regions.

“Given our clients are already present in some of these regions, it really does lower the barrier for entry for us in some cases — and in others, to enter these new markets,” the CEO said. “It’s a near-term focus for us.”

Michael also called crypto custody “a great anchor product,” adding that Bakkt’s custody offering is protected by $125 million of insurance coverage. He noted the firm would look to continue building upon what he labeled as a “critically important business.” 

Specifically, the company seeks to upgrade its architecture to better service its partners and institutional clients. Such enhancements include automated hot wallets to allow consumer deposits and withdrawals, as well as yield-generating offerings such as staking. 

“We feel really good about the green shoots that we’re seeing here, and we expect custody to continue to ramp up as the year progresses.”

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