Bakkt’s Crypto Carousel: Big Promises, Shrinking Margins—and Why the Ride Suddenly Stopped
Bakkt Holdings, Inc. (NYSE: BKKT) in recent days. The digital asset hopeful, once a darling of crypto infrastructure, finds itself at the crossroads of promise and peril. Its stock tumbled a dramatic -31.7% over the past 5 days, erasing much of the recent speculative gains and leaving investors wondering: what derailed the momentum?
Promises Made, Clients Lost: The Unraveling Begins
Bakkt’s business was built on the promise of “crypto-as-a-service”—enabling firms to embed digital asset trading for their own customers. The model worked, until it didn’t. On March 17, the company revealed the impending loss of Webull, which accounted for 74% of its crypto services revenue during the first 9 months of 2024. Just weeks later, Bank of America pulled the plug on a loyalty contract worth another 17% of revenue. The result? A panic-driven selloff, with Bakkt shares plunging 27.3% in a single day and continuing to spiral downward in the months that followed.
Litigation and Liquidity: When the Carousel Turns Into a Lawsuit
April brought a class-action lawsuit alleging misleading statements about Bakkt’s core client relationships and crypto revenue. The legal cloud is far from trivial: the company faces a probable settlement range of $14–20 million, with $3 million already earmarked for affected shareholders. This litigation, combined with the loss of anchor clients, has cast long shadows over Bakkt’s future cash flows and market credibility.
The Numbers Behind the Nosedive
Recent financials paint a stark picture. Despite a 92.8% year-over-year revenue growth (TTM ending Q3 2025), margins are razor-thin, with the net income margin stuck at -1.1% and operating cash flow persistently negative. The company burned through $101.28 million in Q1 2025 alone, leaving just $64 million in cash and restricted cash by Q3. With a debt-to-equity ratio now at 0.68 and a tangible book value of -$32.26 million, Bakkt’s financial health resembles less a fortress, more a sandcastle at high tide.
Competitive Heat: Coinbase and the Giants in the Arena
The digital asset ecosystem is unforgiving to laggards. Bakkt’s platform, intended to scale rapidly via B2B partnerships, has lagged far behind giants like Coinbase and Block, both of whom boast superior technology, brand recognition, and user engagement. Private players like Fireblocks are also eating away at Bakkt’s niche. In this landscape, scale and trust are everything—and Bakkt’s recent client losses have only amplified its vulnerability.
Macro Moves and Regulatory Whirlwinds
Crypto markets have been volatile, but macro tailwinds—like the potential passage of the CLARITY Act and the rise of stablecoin adoption—could have offered Bakkt a lifeline. Instead, the company is caught in the crosscurrents: regulatory uncertainty, fierce competition, and a need for transformative capital raises. The “picks and shovels” layer of digital assets is growing, but Bakkt is increasingly a spectator, not a beneficiary.
Trading Floor Chatter: The Volume Surge That Spooked the Crowd
On November 20, Bakkt’s stock fell 13.07% in a single session—despite a surge in trading volume (+820,000 shares). Such spikes often signal forced liquidations or a rush for the exits, not renewed optimism. Historical price action is no less sobering: the stock is down 52.5% over the past year, and even with a wild 85.7% rally in the last 3 months, the 5-day collapse underscores just how fragile recovery can be when fundamentals are missing.
The Buffett Test: Why Value Investors Steer Clear
Bakkt’s story is an object lesson in what Warren Buffett, Charlie Munger, and Bill Ackman avoid: negative free cash flow, no durable competitive moat, and revenues built on unstable client relationships. With a projected 73% drop in revenue and survival dependent on capital infusions or new major clients, Bakkt’s fate hangs in the balance.
Where Does the Carousel Stop?
Bakkt’s leadership touts a pivot to international expansion and a leaner business model—initiatives in Japan, South Korea, and India are underway. But the numbers don’t lie. Unless Bakkt can secure new anchor clients or unlock high-margin growth, insolvency within 18–24 months is a real risk. The fair value estimate sits below $10 per share, a warning that the current price is still disconnected from reality.
The crypto carousel spins fast—and, for Bakkt, the music may be fading. For investors, the lesson is clear: watch the numbers, not the promises, as the digital asset landscape continues to evolve.