Bakkt Holdings Stock Plunges as Major Partnerships Terminated

Significant Revenue Losses Threaten Financial Stability

Bakkt Holdings, Inc. (NYSE:BKKT) shares experienced a staggering 50% decline following the abrupt termination of pivotal commercial agreements with Bank of America and Webull Pay LLC, raising serious concerns about the company’s financial future and operational viability. These partnerships, vital to Bakkt’s revenue streams in both loyalty and cryptocurrency services, have been linchpins for the Alpharetta, Georgia-based firm, which is 55% owned by Intercontinental Exchange (ICE), the parent of the New York Stock Exchange. The news, disclosed in a recent SEC filing, underscores the fragility of Bakkt’s business model amid an increasingly competitive fintech and crypto landscape. Investors seeking insights into the Bakkt Holdings stock decline and its implications will find a detailed breakdown of these developments, including revenue impacts, strategic responses, and potential paths forward.

The Bank of America partnership, slated to end on April 22, 2025, has been a cornerstone of Bakkt’s loyalty services segment, contributing approximately 16% to 17% of this revenue category for the year ended December 31, 2023, and the nine months ended September 30, 2024, respectively. In 2023 alone, loyalty services generated $53.1 million, meaning Bank of America’s share was roughly $8.5 million annually. While the exact nature of this agreement remains partially obscured, speculation points to a purchasing card facility or similar financial arrangement, a theory bolstered by Bakkt’s February 2024 disclosure of a reduced credit line from the bank. Simultaneously, the Webull Pay LLC partnership, set to expire on June 14, 2025, has been even more critical, accounting for about 74% of Bakkt’s crypto services revenue. With crypto services raking in $726.9 million in 2023, Webull’s contribution translates to approximately $538.3 million, a figure amplified by Bakkt’s acquisition of Apex Crypto (rebranded Bakkt Crypto) in April 2023. Combined, these partnerships represent roughly 70% of Bakkt’s total 2023 revenue of $780.1 million, making their loss a potentially existential threat to the company’s financial health.

Compounding these challenges, Bakkt announced it could not file its Annual Report on Form 10-K for the fiscal year ended December 31, 2024, on time, citing the need for additional time to finalize consolidated financial statements and audit documentation. This delay, while not uncommon, adds another layer of uncertainty for investors already rattled by the partnership terminations. The company has pledged to submit the report within the 15-day extension period allowed under Rule 12b-25, but the timing couldn’t be worse, as it coincides with a market reassessment of Bakkt’s value. Historically, Bakkt has struggled with profitability, posting a net loss of $225.8 million in 2023, a significant improvement from $1,989.9 million in 2022, yet still indicative of underlying financial strain. Earlier in 2024, the company issued a going concern warning, hinting at liquidity issues that now appear magnified by the loss of these revenue streams.

Bakkt’s business model, centered on providing software-as-a-service (SaaS) and API solutions for cryptocurrency trading, custody, and loyalty points redemption, has relied heavily on high-profile partnerships to drive growth. The Webull agreement, for instance, enabled Bakkt to offer fiat-to-crypto onramps and trading services to Webull Pay users, fueling the explosive growth in crypto revenue post-Apex acquisition. Losing this deal not only slashes revenue but also jeopardizes Bakkt’s position in the competitive crypto trading platform market. Similarly, the Bank of America exit weakens the loyalty services arm, which facilitates redemption options like travel and gift cards for consumers, a segment that saw a slight decline from $54.5 million in 2022 to $53.1 million in 2023. Together, these setbacks expose Bakkt’s vulnerability to partner dependency, a risk that investors monitoring Bakkt Holdings stock performance must now weigh carefully.

Despite the grim outlook, Bakkt is not standing still. The company has taken steps to pivot and recover, including appointing Ray Kamrath as Chief Commercial Officer in May 2024 to spearhead its crypto business expansion. Additionally, a June 2024 partnership with Crossover Markets aims to launch “BakktX,” a new crypto Electronic Communication Network (ECN) designed to attract institutional clients. Past efforts, such as collaborations with invstr, Swan Bitcoin, and Blockchain.com in 2023, demonstrate Bakkt’s intent to diversify its client base. However, replacing revenue on the scale of $546.8 million (the combined loss from Bank of America and Webull) is a daunting task, particularly in a crypto market marked by volatility and regulatory scrutiny. The success of these initiatives remains uncertain, and investors researching Bakkt Holdings financial stability will need to track upcoming SEC filings and partnership announcements for signs of progress.

For those considering Bakkt Holdings stock investment opportunities, the current 50% price drop might suggest a bargain, but caution is warranted. The company’s ability to secure new revenue sources, whether through fintech alliances or expanded crypto offerings, will determine its survival. The crypto services segment, which ballooned in 2023 due to the Apex acquisition, remains a potential growth driver, but its reliance on partners like Webull highlights a structural weakness. Meanwhile, the loyalty services segment, though smaller, could stabilize with new banking or retail tie-ups, yet the clock is ticking as expiration dates loom in mid-2025. The delayed 10-K filing, expected soon, will offer critical insights into Bakkt’s 2024 performance and liquidity, data points essential for assessing long-term viability.

Bakkt’s journey reflects broader trends in the cryptocurrency and loyalty services industries, where rapid growth can mask underlying risks. Investors drawn to the Bakkt Holdings stock decline as a potential entry point should balance the allure of a discounted price against the reality of a company at a crossroads. The market’s sharp reaction underscores genuine fears about operational sustainability, yet Bakkt’s lineage under ICE and its strategic maneuvers suggest a fighting chance. For now, staying informed through primary sources like SEC filings and company updates will be key to navigating this turbulent chapter in Bakkt’s story.