How Does Bakkt Company Work?

How is Bakkt reshaping institutional access to crypto?

Bakkt has grown from a consumer rewards app into a B2B2C infrastructure provider that processes institutional crypto flows and partners with banks and fintechs. By 2025 it reported over 500 billion dollars in cumulative partner-enabled transactions, emphasizing compliance and scale.

Bakkt’s compliance-first, high-throughput platform enables regulated custody, settlement and white-label trading for financial institutions, turning digital assets into enterprise-grade services. See Bakkt Porter's Five Forces Analysis for strategic context.

Bakkt creates value through institutional-grade custody, crypto-as-a-service (CaaS), and advanced settlement services, offering banks and fintechs an API-driven platform to integrate crypto buying, selling, and holding without building their own vaults or obtaining state licenses.

Institutional Custody

Bakkt operates as a qualified custodian with BitLicense coverage and stores assets in air-gapped cold storage using multi-layer security protocols to meet regulatory and enterprise standards.

API-Driven CaaS

Its API enables banks, credit unions, and fintechs to embed crypto features directly into existing UIs, removing technical and compliance hurdles for B2B2C distribution.

Smart Order Routing

Bakkt’s smart order router scans multiple liquidity partners to secure best execution while an internal ledger supports near real-time settlement and reconciliation.

Enterprise Governance

Built with NYSE-grade governance and risk controls, Bakkt attracts Tier-1 institutions seeking trust, safety, and regulatory certainty in digital assets.

Operationally, a partner customer trade triggers the router and ledger workflow, backed by a cloud security stack and a network of liquidity providers; as of 2025 Bakkt reports custody assets under management exceeding $1.2 billion and processes institutional settlement volumes in the low billions monthly.

Core Advantages

Bakkt’s value proposition centers on regulated custody, turnkey integration, and settlement efficiency—bridging traditional finance and crypto markets for conservative institutions.

• Qualified custodian status and BitLicense compliance
• API-first CaaS for rapid partner rollout
• Smart order routing across liquidity pools
• NYSE-level governance and risk management

For a deeper look at product positioning and go-to-market, see Marketing Strategy of Bakkt

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Bakkt’s revenue strategy centers on recurring subscription and transaction-based fees from institutional partnerships, with crypto services trading volumes driving the bulk of top-line performance in volatile markets.

Transaction-based fees

Transaction fees—earned as spreads or fixed commissions—made up approximately 75% of revenue in fiscal 2025, reflecting elevated volatility and retail activity via partners.

Crypto services revenue

Crypto services revenue includes the gross value of digital assets traded on the Bakkt platform and is the largest single contributor to the company’s top line.

Subscription & service fees

Enterprise subscription fees, custody charges tied to AUC, and implementation fees create a predictable base; service-based revenue rose 30% year-over-year by late 2025.

Custody and AUC pricing

Custody fees are assessed as a percentage of Assets Under Custody (AUC), aligning revenue with asset growth and institutional onboarding.

Analytics & reporting

Monetized analytics and compliance reporting sell as premium add-ons to institutional clients, supporting higher-margin SaaS dynamics on the platform.

Partner revenue share

Revenue is often routed through partner agreements, with Bakkt earning fees on transactions executed for partner clients and shared commissions on referral volumes.

Revenue resilience combines volume-sensitive trading income with steady infrastructure contracts and SaaS-like services, positioning the platform to capture upside during rallies while maintaining baseline recurring fees.

Key monetization elements

Revenue composition and growth drivers for Bakkt reflect its institutional focus and diversified fee mix.

• Transaction-based fees as primary revenue—about 75% in 2025
• Service/subscription revenue up 30% YoY in late 2025
• Custody fees tied to AUC provide recurring income
• Analytics, compliance tools, and partner-sharing broaden monetization

Read a detailed breakdown of the company’s commercial model here: Revenue Streams & Business Model of Bakkt

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Bakkt’s transformation centers on a pivot from retail to B2B after its 2023 Apex Crypto acquisition, rapid 2024–2025 international expansion, and a move to pure infrastructure with institutional-grade custody and APIs.

Key Milestone: Apex Crypto acquisition (2023)

The 2023 acquisition of Apex Crypto expanded Bakkt’s addressable market by millions of accounts and accelerated its shift to a B2B Bakkt business model.

Strategic Shift: Sunsetting consumer app

Bakkt retired its consumer-facing app to cut customer acquisition costs and concentrate R&D on institutional APIs, custody, and integration tooling.

Internationalization: LATAM & SEA (2024–2025)

In 2024–2025 Bakkt secured major partnerships across Latin America and Southeast Asia, localizing infrastructure and compliance to serve regional banks and custodians.

Infrastructure focus: Institutional-grade custody

R&D prioritized proprietary custody architecture combining HSMs and MPC, increasing security and positioning Bakkt digital assets services for regulated institutions.

The combined effect of these milestones produced a regulatory-first, API-driven platform that appeals to banks and institutional partners seeking compliant digital asset services.

Competitive Edge: Regulatory moat and ICE relationship

Bakkt’s alignment with SEC and NYDFS expectations and its connection to Intercontinental Exchange provide partner confidence and market stability.

• Regulatory compliance reduced legal risk and enabled partnerships with regulated banks.
• Custody technology uses HSMs plus MPC to provide institutional-grade key management.
• API integrations with core banking create high switching costs and recurring revenue potential.
• Global localization in LATAM and SEA broadened addressable market and revenue diversification.

Relevant metrics through 2025: Bakkt’s B2B client base grew by over 200% post-Apex integration; cross-border platform activations exceeded 1.2 million accounts via partner banks; custody AUM reached an estimated $3.6 billion by year-end 2025, driven largely by institutional integrations. For ecosystem context and competitor positioning see Competitors Landscape of Bakkt.

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As of early 2026, Bakkt stands as one of the top three digital asset infrastructure providers in North America, with deep penetration into credit unions and regional banks and a focus on institutional custody and settlement services.

Industry Position

Bakkt competes with Coinbase Prime and BitGo in institutional custody and settlement, handling custody for hundreds of regional financial institutions and processing transaction flows across custody and settlement rails.

Market Penetration

By 2025 Bakkt reported custody relationships covering over 1,200 credit unions and regional banks and processed >$XX billion in custody AUM and settlement volume across its platform.

Risks

Key risks include major traditional banks building in-house custody, crypto market volatility affecting quarterly revenues, and regulatory shifts in stablecoin or staking rules that could impact product lines.

Regulatory Exposure

Bakkt benefits from high compliance standards but remains sensitive to sudden regulatory changes; specific product revenues may fluctuate if stablecoin or staking legislation tightens.

Bakkt's strategic outlook centers on tokenization and expanding beyond cryptocurrencies into real-world assets, leveraging existing custody and settlement rails to become core infrastructure for institutional blockchain access.

Future Outlook & Strategic Initiatives

Leadership has signaled a 2026 roadmap focused on tokenized RWAs and a stablecoin-as-a-service product for corporate treasuries, positioning Bakkt as essential 'plumbing' regardless of token price cycles.

• Launch of stablecoin-as-a-service target: live pilots with corporate treasuries in 2026 Q3.
• RWA tokenization push aiming to onboard private equity and real estate token custody by 2027.
• Maintain growth through institutional integrations rather than retail brand awareness.
• Mitigate volatility risk by diversifying revenue into fee-for-service custody and settlement for tokenized assets.

For context on target customers and go-to-market strategy see Target Market of Bakkt, which complements Bakkt explained and How Bakkt works discussions while outlining Bakkt business model and Bakkt custody solutions.

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