Bakkt Continues International Expansion as US Maintains Regulatory Uncertainty

Bakkt Holdings, a provider of crypto trading and custody services, is prioritizing international expansion as a key component of its business strategy.

The company aims to enter nine new international markets by the end of the year, recognizing the potential for growth and revenue generation outside of the challenging U.S. crypto market, Bakkt President and CEO Gavin Michael said Tuesday (Nov. 14) during the company’s quarterly earnings call.

The decision to focus on international expansion comes as Bakkt acknowledges the regulatory uncertainty and muted trading volumes in the U.S. market. By targeting markets with greater regulatory clarity and a sizable addressable market, Bakkt aims to capitalize on opportunities for growth, Michael said.

Bakkt has already made progress in expanding its presence in international markets. It offers crypto trading in Spain and several Latin American countries, including Argentina, Brazil and Mexico. The company plans to expand its reach in Latin America. Additionally, Bakkt intends to expand its crypto trading and custody services in the United Kingdom, European Union, Australia and various Asian markets, including Singapore and Hong Kong, by the end of the year.

The company’s international expansion efforts align with its “land and expand” strategy, Michael said during the call. Bakkt aims to establish a foothold in new markets and then expand its network and reach with other clients.

While Bakkt remains committed to the U.S. market, it has adjusted its strategy to overcome the regulatory environment, Michael said. 

In addition to international expansion, Bakkt continues to focus on its core offerings, including custody services and signing up new clients, Michael said. The company has diversified its revenue streams by offering custody products that are not solely reliant on trading volumes. By adopting a subscription-based revenue model, Bakkt has reduced its dependence on market volumes.

Bakkt is also investing in the Lightning Network, a technology that enables faster and more scalable bitcoin transactions, Michael said. The company plans to launch its Lightning service to select clients in the near future, facilitating cross-border remittances, B2B settlements and instantaneous deposits and withdrawals.

Crypto is not trying to replace the existing infrastructure, Michael told PYMNTS in an interview posted in April. Instead, the crypto industry should prioritize providing a new payment rail that works well across other use cases.

“Regulatory clarity is really instrumental in creating the appropriate guardrails so that [the industry] can get the right innovations in place around payments so that they can flourish,” Michael said at the time.