Benchmark recommends buying Bakkt after strategic shift

• Benchmark initiates coverage of Bakkt with a buy recommendation
• Company bets on bitcoin treasury and stablecoins
• BKKT shares rise 6,7% after positive report

Bakkt, a cryptocurrency infrastructure company founded in 2018, has received a bullish recommendation from Benchmark. Analyst Mark Palmer initiated coverage with a "buy" rating and a $13 price target on the company's shares, listed under the ticker BKKT. In his analysis, Palmer highlighted that the company is poised for "a fresh start" after a cycle of restructuring and shifts in strategic focus.

According to the report, Bakkt has abandoned businesses deemed non-strategic, such as its custody division and loyalty points operation—the latter of which is currently being sold—and is now focusing on three main areas: Bitcoin treasury, turnkey brokerage solutions, and stablecoin payments. Under the leadership of CEO Akshay Naheta, the company is expected to reposition itself in the global cryptocurrency market.

Among recent plans, Bakkt announced plans to raise $1 billion to expand its Bitcoin and digital asset treasury. It also plans to acquire a 30% stake in Japanese brokerage MarushoHotta, strengthening its international presence. Another distinguishing feature highlighted by Benchmark is the company's strategy of acquiring money transmission licenses in all 50 US states, in addition to already holding a New York State BitLicense, positioning it as a comprehensive infrastructure provider for banks, brokerages, and fintechs.

In the payments space, the company is developing Bakkt Agent, a stablecoin settlement platform in private beta, expected to operate in approximately 90 countries. This initiative comes at a time of expanding stablecoin use in the financial sector. Palmer emphasized that "these integrated distribution partnerships provide BKKT with scalable growth through a B2B2C model, without the need for direct consumer acquisition."

Despite the positive assessment, Benchmark warned of risks that could affect the strategy's execution, such as the possibility of Bakkt failing to complete the sale of its loyalty points division, as well as regulatory challenges and dependence on large clients. In March, the company revealed that the brokerage Webull, responsible for almost 75% of its revenue, would not renew its contract after June 2025.

BKKT shares responded immediately to the new recommendation, rising 6,7%.