Bakkt Sharpens Crypto Focus After Loyalty Exit

Bakkt is shedding its loyalty rewards program and securing new funding to concentrate primarily on infrastructure for digital assets.

The company is selling its loyalty division to Project Labrador Holdco, a branch of Roman DBDR Technology Advisors, for $11 million in cash.

The agreement, anticipated to be finalized in the third quarter, will also include modifications for liabilities and a temporary, limited cash loan to facilitate the transition, according to a recent statement. Once the deal concludes, the loyalty sector will be classified as a discontinued operation.

Andy Main, president and co-CEO, stated that the sale allows for greater focus and the allocation of all resources to core cryptocurrency offerings and the stablecoin payment ecosystem.

Akshay Naheta, co-CEO, added that the company is now entirely committed to accelerating innovation, improving operational efficiency, and building for scale. Plans include upgrading the trading technology and progressing the crypto treasury strategy unveiled in June.

The sale of the loyalty business forms part of Bakkt’s broader strategy to streamline operations and prioritize core crypto services like custody, stablecoin payments, and tokenized assets. During the second quarter, the crypto business generated $568 million to $569 million in revenue, while the loyalty division produced around $10 million.

Max Shannon, senior associate for research at Bitwise Asset Management, explained that this signals a decisive move away from consumer-focused ventures and a stronger emphasis on institutional-level crypto infrastructure, where trust, security, compliance, and scalability are vital.

However, Shannon believes Bakkt will face a challenge in competing with Coinbase, which possesses significant influence in institutional partnerships and holds custody of 8 of the 11 Bitcoin ETFs.

Shannon also suggested that the capital raise reflects underlying financial pressures resulting from substantial customer withdrawals, impacting operational losses and the balance sheet linked to the loyalty division.

Tomas Fanta, principal at crypto-native venture firm Heartcore, described Bakkt’s decision to include Bitcoin in its treasury as “unusual,” arguing that it “doesn’t add much value to its core business.”

Despite this, Fanta acknowledges that the loyalty sale was a strategic move to divest from a less profitable business segment. He views the Bitcoin treasury move as a blend of following current trends and strategic planning, but anticipates it will not significantly contribute to restructuring efforts in the immediate future.

However, some in the industry see this broader move as a push for improved crypto infrastructure.

Kony Kwong, CEO and co-founder at GAIB, a platform linking compute power and on-chain finance, stated that doubling down on custody, stablecoin infrastructure, and tokenized assets signifies that infrastructure is the primary focus in the current market.

Kwong added that Bakkt needs to cultivate a unique competitive advantage through technology, specialized markets, or stronger institutional relationships.