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Bakkt Holdings, Inc. Is Flying But Should I Invest?

Bakkt Holdings is making moves this week after announcing new partnerships with Mastercard and Fiserv to integrate digital asset solutions

Mastercard (NASDAQ: MA) has been making a number of moves in the digital asset space, but the most recent is partnering with Bakkt Holdings (NASDAQ: BKKT) to offer branded crypto debit and credit cards. A second deal with Fiserv (NASDAQ: FISV) will integrate digital assets offerings in payouts, rewards programs, and transactions that will be available through digital wallets.

Bakkt went public via SPAC on 18 October 2021 and is already making a name for itself on wall street. Up over 234% on October 25 off the back of these deals, the crypto app has crawled over a billion-dollar valuation in no time.

What does Bakkt do?

Founded in 2018, Bakkt is still in its infancy. It is an app that allows users to buy, sell, transfer, gift, and spend crypto. If you check out its initial investor presentation, Bakkt is aiming to be an exchange, a digital bank, a payments service, and a rewards giver, all blended into one platform. The primary market is a cryptocurrency and the other targets include the loyalty cards market worth $316 billion and the gift card market worth $703 billion. Its ambitions could be looked at as some combination of Venmo, Coinbase, and Square, and with trading equities as a future addition in the works, maybe you can add Robinhood to that list too. So whether it’s mentioned or not, they are the competitors.

What about the financials and users?

As with many stocks zooming up and down in recent weeks, Bakkt is another company that has gone public via SPAC. No revenue or profit figures and no active membership numbers have been given, only forward projections. In a CNBC interview, CEO Gavin Michael was asked about daily active users, but he did not disclose the number. He said they will discuss key performance indicators from the first investor day, which presumably refers to the Q3 earnings call on 12 November 2021. 

Time to buy?

Nope. Despite some partnerships with Google Pay, Starbucks, Finastra, and Choice Hotels, offering some credibility., it’s impossible to make a sound investment decision based on such little information right now. Although the business plan looks convincing, the financials will need to be published in order to see if Bakkt’s projections are achievable. 31 million users and $6.5 billion in revenue in five years’ time is all well and good until we find out they have no customers and no revenue. SPACs are volatile. Crypto is definitely volatile. So strap in for a bumpy ride if you plan to invest. 

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