What is going on with Bakkt Holdings (NASDAQ:BKKT) today? Bakkt made its public debut last year after reverse merging with VPC Impact Acquisition. The company operates as a digital asset platform where users can earn and use loyalty rewards in the form of crypto. After climbing to as high as $50 in November, shares of BKKT stock are now trading near $5. However, an announcement has shareholders excited today.
BKKT Stock: Bakkt Selected by Nexo to Custody Cryptocurrency
Today, Bakkt announced that it would be entering into a partnership with digital assets firm Nexo to custody its cryptocurrency assets in the Bakkt Warehouse. The Bakkt Warehouse is Bakkt’s regulated custodian and allows for secure storage of Bitcoin (CCC:BTC-USD) and Ethereum (CCC:ETH-USD). Furthermore, the Bakkt Warehouse launched in 2019 and allows for both online and offline digital asset storage. Bakkt added that it will implement additional safeguarding measures to protect Nexo’s assets, such as multi-zone physical security.
Nexo Business Development Executive George Manolov praised the partnership, adding that:
“We recognized that Bakkt’s infrastructure and regulation-first approach to crypto was a natural fit and we’re confident that this partnership will benefit all our clients and expand Nexo’s ability to service the unprecedented institutional demand for cryptocurrencies as well as individuals’ growing transaction volumes.”
This news follows the departure of Bakkt CEO and founder Adam White last month. White confirmed his departure on Twitter, although he did not indicate the reason for his departure or where he was headed to next.
The Bottom Line on Bakkt
While the Nexo partnership is certainly good news, Bakkt still has a long road ahead. InvestorPlace contributor Dana Blankenhorn points out that “Bakkt needs crypto assets to maintain their value to spur consumer interest. Turning miles into Bitcoin sounds great if Bitcoin’s value is rising. It’s not so great if Bitcoin’s value is falling.”
It seems that Bakkt’s performance may correlate with the performance of Bitcoin and other cryptocurrencies. Logically, no consumer would want to convert their reward points to crypto if the possibility of the crypto losing value was significant. If an investor believes crypto is here to stay, then Bakkt could be a viable investment opportunity.
Meanwhile, Bakkt has formed partnerships with Mastercard (NYSE:MA) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). These partnerships will help lend Bakkt reputability as it navigates through the crypto and loyalty program world.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.