Bakkt has announced that it will acquire loyalty program provider Bridge2 Solutions in a move that could open up a trillion-dollar market for the fledgling crypto exchange, according to the CEO of its parent company, the Intercontinental Exchange (ICE).
Bridge2 is a loyalty rewards platform for merchants and financial institutions with a combined total of $60 billion worth of reward points, according to Fortune. Bakkt intends to leverage Bridge2’s existing merchant relationships to build out its own consumer app. Bridge2 also operates a pilot project called Loyalty Pay, which, when integrated with Bakkt, will allow merchants to link payment processes directly to the Bakkt app, therefore removing a 2.5% interchange fee charged by banks.
Jeffrey Sprecher, CEO of Bakkt’s parent company ICE, said during its earnings call on Thursday, “the next big hurdle for the company will be getting that app into consumer hands and we will be looking at consumer adoption more than revenue or expense. Fortunately, that company is not a big drain on us … we have a lot of financial flexibility now from the company given it has a revenue stream both from trading and from operation of all these rewards programs.”
Bakkt intends to launch the app in the first half of 2020.
The announcement comes as Bakkt prepares to enter the second phase of growth, one that is aimed at expanding consumer adoption, following a hugely underwhelming first few months of operation. Last week, it was reported that the exchange saw exactly zero Bitcoin options traded; prior to that, the last activity reported was on January 17 when 20 options changed hands.
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Bakkt’s physically settled futures contracts, which were launched in December, were also met with underwhelming volumes in the early days—a fact that was immediately unfavorably compared with the fiat-settled BTC futures on closest rival the Chicago Mercantile Exchange (CME), which first went to market in December 2017.
Featured image: DepositPhotos © grejak
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