Bakkt Holdings, Inc. (BKKT): 5 FORCES Analysis [Nov-2025 Updated]

You're looking for a clear, no-nonsense assessment of the company's competitive position after its 2025 pivot to a pure-play crypto infrastructure business, so here is the defintely precise Five Forces breakdown. Honestly, the late-2025 landscape is a study in contrasts: while the 55% ownership by Intercontinental Exchange provides a structural advantage against new entrants, the customer bargaining power is clearly winning the day, evidenced by the razor-thin $2.9 million net revenue against $568.1 million in gross crypto services revenue for Q2 2025. That intense pressure is reflected in the competitive rivalry, where a price-to-sales ratio of just 0.2x contrasts sharply with peers trading above 4x, all while the company posted a $30.2 million net loss that quarter. To make your next move, you need to see exactly how strong the threats from traditional rails and potential new bank entrants really are; let's dive into the forces below.

Bakkt Holdings, Inc. (BKKT) - Porter's Five Forces: Bargaining power of suppliers

You're looking at Bakkt Holdings, Inc.'s supplier landscape as of late 2025, post-transformation. The power these external entities hold over Bakkt's operations and cost structure is a key lever in its profitability, especially as the company focuses on its core crypto infrastructure business.

Intercontinental Exchange (ICE) remains a central, highly specialized supplier, given its historical ties and current role. ICE holds a 55% ownership stake, making it a dominant, specialized supplier of trust and infrastructure, even after the strategic divestiture of the Bakkt Trust Company LLC for $4.5 million cash plus the assumption of regulatory capital requirements of approximately $3.0 million. This sale, completed around May 2025, shifted custody from an internal unit to a related-party service provider, ICE Digital Trust, LLC (IDT), via a new nonbinding letter of intent. This creates a single, powerful custody provider for Bakkt's platform services, which is a significant concentration of power.

The underlying commodity for Bakkt's Markets engine-core crypto assets like Bitcoin-is decentralized. This inherently limits supplier power over the actual underlying asset itself, which is a major advantage for Bakkt's trading and liquidity services. However, the infrastructure supporting the trading of those assets is not decentralized.

Technology suppliers for the API-based Brokerage-in-a-box solution are specialized. Bakkt Brokerage relies on robust APIs for KYC/AML, trade execution, and compliance, leveraging partnerships with firms like Plaid and other banking partners for fiat rails. These specialized technology integrations, while accelerating time-to-value, often demand premium pricing due to the high integration effort and the need for institutional-grade security certifications like SOC 1 Type 2 and SOC 2 Type 2.

Here's a quick look at the supplier dynamics influencing Bakkt's cost structure:

• ICE Digital Trust: Single-source custody creates high switching costs.
• Technology Vendors: Specialization in regulated crypto APIs limits immediate alternatives.
• Banking Partners: Essential for fiat funding, giving them leverage over on/off-ramp costs.
• Crypto Costs: Execution, clearing, and brokerage fees rose with Q3 2025 revenue growth of 27.1% year-over-year.

The shift to a pure-play crypto infrastructure model, completed with the sale of the Loyalty business on October 1, 2025, means Bakkt is now more acutely dependent on the specialized infrastructure providers that power its institutional-grade trading and payment solutions. Finance: draft 13-week cash view by Friday.

Bakkt Holdings, Inc. (BKKT) - Porter's Five Forces: Bargaining power of customers

You're analyzing Bakkt Holdings, Inc.'s position, and the customer side of the equation is definitely where the pressure is highest right now. The bargaining power of customers is significant because Bakkt Holdings, Inc. has strategically pivoted to an embedded service layer, meaning their clients-fintechs, neobanks, and brokerages-are sophisticated entities themselves, demanding high performance and low cost for their own end-users. This customer segment is not buying a simple off-the-shelf product; they are integrating core infrastructure via APIs.

The financial data from the second quarter of 2025 clearly illustrates this price sensitivity. Bakkt Holdings, Inc. reported a $568.1 million in gross crypto services revenue for Q2 2025. However, after accounting for crypto costs and execution, clearing, and brokerage fees (ECB), the net crypto services revenue was only $2.9 million. Here's the quick math: that means the direct costs associated with generating that gross revenue consumed over 99.49% of it ($568.1 million gross minus $2.9 million net leaves $565.2 million in costs). This razor-thin margin on core crypto services strongly signals that customers have the leverage to push pricing down, as Bakkt Holdings, Inc. has very little room to absorb cost increases or offer discounts.

The competitive landscape means customers have robust alternatives for their crypto infrastructure needs. Bakkt Holdings, Inc. is fighting for the same institutional and enterprise clients against established, well-funded private players and incumbents. Strong alternatives include platforms like Coinbase Prime, Fireblocks, and Anchorage, all of which offer comparable API integrations, custody solutions, and stablecoin rails. The market for crypto infrastructure is not a monopoly; it's a fight for developer mindshare and enterprise contracts.

We see evidence of this customer power and the drive toward insourcing or switching in past client behavior. For instance, the client Webull, which represented 74% of Bakkt Holdings, Inc.'s crypto revenues in 2024, notified the company that it would not renew its contract in mid-2025 as it scaled to run more of its own infrastructure. This move by a single, high-volume client demonstrates that for large, sophisticated users, building or migrating infrastructure is a manageable project, not an insurmountable barrier.

Switching costs are therefore best characterized as moderate. While integrating a new API stack and ensuring compliance and trade execution routing is a significant engineering project for a fintech or neobank, it is definitely achievable, as evidenced by the Webull transition. If Bakkt Holdings, Inc.'s service quality or pricing falters, these clients have the technical capacity to evaluate and onboard a competitor like Fireblocks or Anchorage. The moderate nature of these costs means customer retention depends heavily on superior execution and competitive fee structures.

Here is a summary of the forces impacting customer power:

• Customer type: Sophisticated fintechs and neobanks.
• Margin pressure: Net revenue of $2.9 million on $568.1 million gross crypto revenue in Q2 2025.
• Alternative providers: Coinbase Prime, Fireblocks, and Anchorage.
• Client history: Major client Webull moved to self-service in 2025.
• Cost to switch: Integration of new APIs is a project, not a blockade.

The financial reality is that Bakkt Holdings, Inc. is operating in a business where the cost of service delivery is extremely high relative to the net revenue captured, putting the pricing leverage squarely in the hands of the customer base.

Finance: draft 13-week cash view by Friday.

Bakkt Holdings, Inc. (BKKT) - Porter's Five Forces: Competitive rivalry

Rivalry is intense in the crypto infrastructure sector, you see this clearly when you look at the established, well-funded players like Coinbase and Fireblocks. Fireblocks, for instance, secures over $10 trillion in digital asset transactions across 120+ blockchains for thousands of organizations, including BNY and Revolut. This level of institutional trust and scale sets a very high bar for any competitor trying to capture custody or payment flow business.

The market pressure on Bakkt Holdings, Inc. is evident in its valuation metrics when compared to these peers. The company's low price-to-sales ratio of 0.2x contrasts sharply with established peers; for example, Coinbase Global (COIN) has a Price-to-Sales (P/S) ratio of 8.51 as of November 21, 2025, and another report places it at 9.36 as of November 20, 2025. This significant valuation gap suggests the market is pricing in substantial execution risk or lower growth expectations for Bakkt Holdings, Inc. relative to its competition, which definitely reflects market pressure.

Financially, the competitive environment translates directly into losses, which you see in the quarterly reports. Bakkt Holdings, Inc. reported a net loss of $30.2 million for the second quarter of 2025. While the company showed operational improvement, posting an adjusted EBITDA profit of $28.7 million in Q3 2025, the Q2 GAAP loss highlights the high cost structure required to compete in this space.

The overall market is definitely growing, especially with the focus on stablecoin payments and institutional adoption, but competitors are fighting fiercely for institutional inflows and custody assets. Bakkt Holdings, Inc.'s Q2 2025 Assets Under Custody (AUC) totaled $1,355.0 million, though this was impacted by the sale of its Trust business. The company is making strategic moves to compete, such as filing for a shelf offering up to $1 billion to fund a Bitcoin treasury strategy, which, if fully deployed, could see them acquire over 9,300 BTC, potentially surpassing Coinbase's reported 9,267 BTC reserves at one point.

Here's a quick look at some key competitive and financial data points from the recent reporting periods:

The intensity of rivalry is further illustrated by the strategic actions taken by Bakkt Holdings, Inc. to simplify and focus its business, which is a common response to high competitive pressure:

• Completed sale of Bakkt Trust to Intercontinental Exchange (ICE).
• Signed definitive agreement to divest Loyalty business (closing expected in Q3 2025).
• Collapsed legacy Up-C structure to unify shareholders on November 3, 2025.
• Secured a commercial agreement with Distributed Technologies Research Global Ltd. (DTR) for stablecoin payment infrastructure.

If onboarding takes 14+ days for institutional clients, churn risk rises because competitors like Fireblocks emphasize speed and reliability in their infrastructure offerings. Finance: draft 13-week cash view by Friday.

Bakkt Holdings, Inc. (BKKT) - Porter's Five Forces: Threat of substitutes

Traditional financial rails like Visa and Mastercard present a significant substitution threat, even as stablecoins gain traction. Global stablecoin transfers reached $27.6 trillion in 2024, outpacing Visa and Mastercard's combined transaction volume by 7.68% in that year. In the first quarter of 2025 alone, dollar-linked crypto tokens facilitated $14 trillion in value movement, surpassing Visa's $13 trillion processing total. Still, Visa maintains dominance in the crypto card space, reporting $365 million in monthly transaction volume as of late November 2025.

Institutions can bypass Bakkt Holdings, Inc.'s API services by building proprietary in-house crypto trading and custody solutions. The institutional crypto custody market was valued at $3.28 billion globally as of July 2025, driven by regulatory clarity and TradFi entry. Leading custodians in this space offer robust insurance policies, sometimes exceeding $320 million. Furthermore, expected custody fees from top providers can range from 0.04% to 0.50% annualized, with negotiation room for high-volume clients.

The threat from specialized custody providers is clear, as institutions seek partners with specific regulatory shields. You see this in the list of top providers as of September 2025:

• Coinbase Prime Custody - Best for US-regulated scale
• Fidelity Digital Assets - Best for traditional finance ops rigor
• BitGo Custody - Best for multi-jurisdiction options
• Anchorage Digital Bank - Best for federal bank oversight
• BNY Mellon Digital Asset Custody - Best for global bank infrastructure

Direct peer-to-peer crypto transactions or self-custody wallets substitute for Bakkt Holdings, Inc.'s brokerage and custody services, appealing to the crypto ethos of self-sovereignty. For individuals, self-custody reduces reliance on intermediaries, but for institutions, it introduces significant operational complexity and risk in managing cryptographic keys at scale. Bakkt Holdings, Inc. itself operates a B2B2C model, which is directly challenged by consumer preference for direct interaction or by partners choosing alternative infrastructure providers.

The broad availability of crypto exchanges and brokers for end-consumers (B2C) limits the perceived value of Bakkt Holdings, Inc.'s B2B2C model. In the crypto card market analysis from late 2025, 10 out of 13 representative projects were associated with Visa, while only three were linked to Mastercard, suggesting a preference for established rails over newer crypto-native payment networks for consumer reach. Bakkt Holdings, Inc. completed the sale of its Loyalty business on October 1, 2025, streamlining its focus away from consumer-facing rewards and more toward institutional infrastructure.

Bakkt Holdings, Inc. (BKKT) - Porter's Five Forces: Threat of new entrants

The threat of new entrants for Bakkt Holdings, Inc. remains a significant factor, though it is currently tempered by high structural barriers that the company has worked hard to establish. New competitors face substantial hurdles related to regulation, capital intensity, and the need to build institutional trust.

Regulatory barriers are high; Bakkt benefits from its ICE lineage and institutional-grade compliance focus. Being approximately 55% owned by Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, provides Bakkt with an inherent level of regulatory comfort and operational experience that a startup simply cannot replicate quickly. Furthermore, Bakkt completed the sale of its trust business to ICE, streamlining its focus onto core crypto infrastructure, which is a move designed to align with the highest institutional standards. This heritage helps Bakkt navigate the complex compliance landscape, which is a major deterrent for less established players.

Rescission of SAB 121 (formerly SAB 121) makes it easier for regulated banks to enter the crypto custody market, increasing the threat. The SEC rescinded SAB 121 via SAB No. 122 on January 23, 2025. This change removes the accounting hurdle that previously required institutions to record customer crypto assets as liabilities on their balance sheets, which discouraged many traditional banks from offering custody services. Now that this barrier is down, expect established financial giants to more aggressively pursue market share in custody and brokerage solutions, directly challenging Bakkt Holdings, Inc.

Significant capital is required for infrastructure and compliance, evidenced by Bakkt's \$75 million capital raise in July 2025. Bakkt successfully closed this underwritten public offering in July 2025, securing gross proceeds of approximately \$75 million. The company intends to use these net proceeds to purchase Bitcoin and other digital assets for its treasury, alongside working capital needs. This need for substantial, recurring capital to fund treasury strategies and maintain robust infrastructure highlights the high financial barrier to entry. To be fair, this capital raise also signals to the market that Bakkt is actively investing to stay ahead, but it also shows the sheer scale of funding required in this space.

New entrants must overcome the trust deficit and scale required to compete with Bakkt Holdings, Inc.'s custody figures. Trust in digital asset handling is paramount, and Bakkt's association with ICE helps bridge that gap. The scale is demonstrated by their custodial figures, which new entrants must match or exceed to be considered a viable alternative for large institutional clients. Here's the quick math on scale as of Q2 2025:

The competitive landscape is shifting from one defined by regulatory ambiguity to one defined by execution and balance sheet strength. New entrants will need to demonstrate immediate, verifiable security and compliance frameworks to gain traction against an incumbent with a legacy financial parent.

Key challenges for potential new entrants include:

• Securing necessary regulatory licenses quickly.
• Matching Bakkt Holdings, Inc.'s institutional trust level.
• Raising capital exceeding the \$75 million level.
• Building out infrastructure for 200+ supported assets.
• Overcoming the incumbent advantage from ICE lineage.

Finance: draft 13-week cash view by Friday.