Bakkt Set To Discontinue Consumer App in B2B Push
“Forward-thinking brands” viewing 2023 as crypto opportunity window before next bull market, Bakkt marketing chief says
Ascannio/Shutterstock.com modified by Blockworks
Crypto marketplace Bakkt is shifting its focus toward embedding digital asset capabilities for partners — rather than catering directly to the customers of those brands.
The company is set to discontinue its consumer-facing app on March 16. Its users will retain access to their crypto and cash on the Bakkt platform through a new web experience.
Launched in March 2021, the Bakkt app is a digital wallet allowing consumers to use digital assets in a number of ways, such as converting rewards points to cash or using bitcoin for payments.
The company disclosed partnerships with brands — including Best Buy, Choice Hotels and Fiserv — when the app launched.
Bakkt had sought to build a marketplace where digital assets were fungible, tradeable and liquid. But the company is now pivoting, according to Mark Elliot, Bakkt’s chief of sales and marketing.
“What we started to see more and more of was adoption for one specific crypto use case inside a bank or inside a rewards company or inside payroll, and less so this notion of wide-open, full-sum liquidity,” Elliot told Blockworks. “We see those platform opportunities with established brands looking to do something in crypto that fit their strategy much more appealing than trying to, in some ways, force-fit those partners into our strategy.”
Bakkt has continued its talks with banks about enabling crypto trading inside their own apps. It is also working with companies such as Mastercard to create crypto rewards and pay-out options.
Some partners, though, have not been interested in other use cases, such as giving their customers the opportunity to engage in crypto transactions, according to Elliot.
“It’s a little bit more leaning into their strategy and engaging with their customers versus trying to have those direct relationships with our customers themselves,” he said. “So we’re focused on embedding those experiences inside partner environments and bringing crypto to brands that customers already know, trust and have some brand love for.”
Brands still see crypto opportunity 2023
Bakkt’s move to discontinue its consumer app comes after the company agreed to acquire crypto trading platform Apex Crypto from Apex Fintech Solutions in November.
Arjun Mehra, a financial analyst at merger and acquisition advisory firm Architect Partners, said in a research note at the time that Bakkt had stated its desire to grow its crypto offering to corporate clients.
“Currently, they have some segments but do not have the product to serve the most active end users,” Mehra said. “By acquiring Apex Crypto, they fill this gap with crypto trading, regulatory frameworks, and clients in the fintech, crypto exchange and neo-bank segments.”
Apex Crypto doesn’t have a consumer-facing app, Elliot said. Rather, the firm works behind the scenes to help clients create a good trading experience, which the executive said is the model Bakkt is looking to replicate.
Bakkt is not the first company to shift its strategy amid a tough market backdrop.
Alongside staff cuts last month, Coinbase said it would be shutting down “several projects where the company has a lower probability of success.”
An Amber Group spokesperson told Blockworks last month it had “gone back to the drawing board” to refocus efforts on its institutional and high net worth clients, which it called the company’s “core engines of growth.”
Elliot argued that while certain partners, such as those in traditional finance, have more questions around safety and security after the crash of FTX, consumer interest in crypto has not materially changed.
“Everybody knows they’re going to have to do something in the crypto space at some point,” he said. “I think the more forward-thinking brands are starting to view 2023 as an opportunity to be more aggressive and attack and build in this moment rather than wait for crypto demand, excitement and energy to come back and then be on their heels.”
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