Bakkt, the digital asset platform backed by Intercontinental Exchange (ICE), reported a sharp decline in first-quarter revenue as the company continues to reposition itself toward stablecoin payments and AI-driven financial services. On Monday, the firm announced a net loss of $11.7 million, or $0.41 per share, for the three months ended March 31, 2026, reversing a net income of $7.7 million, or $1.13 per diluted share, in the same period last year.
The dramatic swing to a loss was driven by a 77% plunge in crypto services revenue, which fell to $243.6 million from $1.07 billion a year earlier. Bakkt attributed the steep decline primarily to lower crypto trading volumes across its platform. However, nearly all of that revenue is offset by crypto costs and brokerage fees, which totaled $242 million in the quarter, leaving the company's core operating metrics essentially flat after stripping out those pass-through costs.
Excluding crypto-related costs, Bakkt's operating expenses held steady at $18.5 million, down slightly from $18.9 million a year ago. The company ended the quarter with $82.6 million in cash, including $69.6 million raised through equity offerings during the period. Bakkt also reported carrying no long-term debt, a sign of financial prudence amid the strategic pivot.
Shares of Bakkt closed at $9.92 on Monday, up 0.71%, but fell 9.14% in pre-market trading on Tuesday to $9.00 following the earnings release. The market reaction reflects uncertainty about the company's ability to successfully transition away from its core crypto trading business.
Bakkt goes all in on stablecoins
Bakkt's shrinking revenue comes as the company is in the middle of a major pivot, moving away from crypto trading infrastructure and toward stablecoin payments and agentic AI. The firm completed its acquisition of Distributed Technologies Research (DTR) on April 30, bringing in an AI-native payments engine and stablecoin compliance stack. In addition, Bakkt signed a memorandum of understanding (MoU) with Zoth, a stablecoin provider targeting $1 billion in annualized payment volumes across South Asia, the Middle East, and Sub-Saharan Africa.
CEO Akshay Naheta, who took the helm in 2024, emphasized the strategic shift in the earnings release. "We believe stablecoin infrastructure represents one of the most significant structural transformations in global finance in decades," Naheta said. He pointed to the GENIUS Act and CLARITY Act as regulatory tailwinds that could boost the value of Bakkt's licensed infrastructure. These U.S. legislative proposals aim to create a clear regulatory framework for stablecoins, potentially opening the door for institutional adoption.
The pivot is not entirely surprising given Bakkt's recent history. Founded in 2018 as a bitcoin futures trading platform, Bakkt struggled to gain traction in the retail crypto market. It pivoted to custody and trading services in 2021 but faced intense competition from Coinbase, Binance, and Kraken. In 2023, the company was acquired by a special purpose acquisition company (SPAC) and later merged with a fintech firm controlled by Naheta. Now, the company is betting on stablecoins as a way to differentiate itself in a crowded market.
Stablecoin infrastructure draws interest
Bakkt's pivot comes as public-market investors show growing interest in stablecoin infrastructure companies. Circle Internet Group, the issuer of USDC, saw its shares rise nearly 16% on Monday after reporting a 20% increase in first-quarter total revenue and reserve income to $694 million. Circle also disclosed a $222 million presale of its ARC blockchain token at a $3 billion fully diluted network valuation. The results highlighted the explosive growth in stablecoin usage: USDC in circulation rose 28% year over year to $77 billion at quarter-end, while onchain transaction volume surged 263% to $21.5 trillion.
The stablecoin market has become a hotbed of activity as traditional financial institutions explore blockchain-based payments. JPMorgan Chase, Visa, and PayPal have all launched or announced stablecoin initiatives. The total market capitalization of stablecoins exceeded $200 billion in early 2026, with Tether (USDT) and USDC dominating the market. Regulatory clarity in the U.S. is seen as a key catalyst for further growth, with the GENIUS Act (Guiding Establishment of National and International Stablecoin Standards) and CLARITY Act (Clarity for Digital Tokens) expected to pass later this year.
Bakkt's acquisition of DTR gives it access to a compliance stack that can handle know-your-customer (KYC) and anti-money laundering (AML) requirements across multiple jurisdictions. Combined with Zoth's payment network targeting emerging markets, Bakkt aims to capture cross-border payment flows that are currently dominated by traditional banking channels and incumbents like Western Union. The company is also exploring AI-powered analytics to detect fraud and optimize transaction routing.
Historical context and challenges
Bakkt's journey has been marked by repeated pivots and financial struggles. Launched with great fanfare in 2018, the platform was initially designed to offer physically settled bitcoin futures, but regulatory delays pushed the launch to 2019. Despite early partnerships with Starbucks and other retailers for in-store cryptocurrency payments, adoption was tepid. In 2021, Bakkt went public via a SPAC merger with VPC Impact Acquisition Holdings, valuing the company at over $2 billion. However, the stock has since lost more than 80% of its value.
The company has faced challenges in generating consistent revenue from crypto trading. In 2022, Bakkt reported a net loss of $55 million on revenue of $200 million. The following year, a short-lived spike in crypto volatility boosted trading volumes, but the overall trend has been downward as retail interest waned. The current pivot to stablecoins represents a high-stakes gamble that the regulatory environment will evolve favorably and that Bakkt can compete with more established players like Circle and Paxos.
One advantage Bakkt holds is its licensing and regulatory compliance infrastructure. The company operates as a New York State-chartered trust company and holds a BitLicense from the New York Department of Financial Services (NYDFS). It also has money transmitter licenses in multiple states. These credentials could be valuable as regulators tighten oversight of stablecoin issuers. The DTR acquisition adds a layer of AI-driven compliance that could help Bakkt scale rapidly without proportional increases in manual review costs.
On the competitive front, Bakkt will face stiff resistance. Circle has already established deep relationships with major exchanges, decentralized finance (DeFi) protocols, and institutional investors. Tether remains the dominant stablecoin by market cap, though its reserves have faced scrutiny. Paxos, the issuer of Binance USD (BUSD) and PayPal USD, has also pivoted to infrastructure services. Bakkt's MoU with Zoth targets underserved regions in Asia and Africa, which could become a niche but high-growth market. However, the company must also contend with local stablecoins and central bank digital currencies (CBDCs) that governments in those regions are developing.
The broader macroeconomic environment adds another layer of uncertainty. Rising interest rates in the U.S. have made yield-bearing stablecoins more attractive, as issuers can earn returns on reserve assets. Circle's revenue growth was partly driven by this dynamic, with reserve income contributing $500 million of the $694 million total. Bakkt's stablecoin infrastructure offering could potentially capture a slice of this revenue by providing compliance and payment processing services to smaller issuers and fintechs that cannot afford to build their own infrastructure.
Despite the financial setbacks, Bakkt's management remains optimistic. Naheta has previously worked at high-profile fintech and crypto firms and brings a network of institutional contacts. The company's cash position, though modest, gives it a runway of several quarters to execute its strategy. The equity offerings during Q1 suggest that investors are willing to provide additional capital if the pivot shows early signs of success.
In the near term, Bakkt will focus on integrating DTR's technology and launching pilot programs with Zoth. The company aims to demonstrate tangible transaction volumes and cost savings for clients. If the regulatory environment becomes more favorable, Bakkt could also apply for a national trust charter that would allow it to operate across all 50 states without individual money transmitter licenses. Such a move would significantly lower compliance costs and accelerate expansion.
The crypto industry is watching Bakkt's transformation closely. If successful, it could validate the thesis that regulated infrastructure providers will dominate the next phase of blockchain adoption. If it fails, it will join a long list of crypto companies that tried and failed to pivot from trading to payments. For now, Bakkt's Q1 results serve as a stark reminder of the volatility and uncertainty that still define the digital asset space.
Source: Cointelegraph News