Bakkt CEO on crypto adoption: ‘I think we’re moving through an inflection point’

Bakkt CEO Gavin Michael joins Yahoo Finance Live to discuss how more businesses are adopting the use of crypto and how to connect the digital economy.

Video transcript

Rachelle Akuffo: Well, joining me now to break this down is Gavin Michael. He's the CEO of Bakkt. Thank you for joining me today. So first of all, people who are familiar talk about--

GAVIN MICHAEL: Pleasure, thank you.

Rachelle Akuffo: Yes. Yes. Talk about your company, and how it evolved from being a crypto platform to now this ecosystem that involves helping businesses, consumers, and institutions with things like rewards and loyalty points.

GAVIN MICHAEL: Yes. So our vision is to really connect the digital economy, to bring together crypto payments and loyalty all in one platform, to make it easy for institutions for consumers and for businesses to really connect with this new asset class. You know, we offer the ability to embed buy-sell opportunities directly into our partners ecosystems.

We work to create new surprise and delight moments through the use of crypto rewards. We worked on paying with and getting paid in digital assets as well as supporting loyalty programs more broadly. The goal of this connecting the digital economy is to lower the barrier to entry, to make it easy for people to be able to enter the asset class and grow as the asset class grows.

Rachelle Akuffo: So then considering how much interest there is around crypto versus who is actually investing or who's able to understand and navigate this space, where are we on the adoption curve?

GAVIN MICHAEL: Oh, I think we're moving through an inflection point. I mean, firstly, crypto is definitely here to stay. We've seen that with the level of interest that we're starting to see and the volumes that are moving through our buy-sell capabilities. But as we think about what is starting to happen, we're seeing more demographics get really interested in crypto. The crypto-curious segment is definitely one that's growing.

And our goal is to provide education and to provide accessibility by making it as easy to enter the crypto space by taking rewards points and exchanging them for crypto, lowering that barrier, or allowing banks like Hanover, Valiant, Manasquan to be able to offer the ability to buy, sell crypto right in their banking application, in that same banking application that their customers know and trust.

So our goal is really to capture this inflection point, to capture the movement that's starting to see significant volume move into these assets, and allow a broader demographic to get involved. In turn what is happening is people are starting to hold more of this currency. We're actually seeing businesses get interested in how do they participate, how do they capture this evolving space, this new demographic. How do they enable new forms of commerce and new forms of rewards. So there's a self-reinforcing network effect that we're starting to see as we move into this inflection point.

Rachelle Akuffo: And as you do take a look at accessibility, as part of Women's History Month, you released your women in crypto study on the key barriers to entry and adoption for women. So talk about some of the key findings from the research, and what could be done to either close that gap or reduce some of these barriers to really encourage more women in crypto?

GAVIN MICHAEL: Yeah, we're very happy, we're very proud of this study. It was time to really coincide with History Month. You know, while crypto is overwhelmingly seen and associated with men, by both genders, only about 5% of non-owning crypto women identified that association as a barrier. In fact, the top barriers they identified were not knowing how to get started, not really understanding crypto, and lacking the extra funds to invest.

Now, many of these barriers are sort of to be expected. Many people but particularly women are really standing on the sidelines. They're intrigued by what is going on with crypto, but they're unsure how to get started. And as I said before, we're seeing crypto appealing to different demographics, to younger demographics.

So it's not really surprising that they lack the extra funds, and that is the top barrier that we see. So our goal is really to drive different forms of entry. So when you think about rewards-- and as I said, we think about the ability to be able to earn in and redeem in crypto-- this is a really easy way to get started if the lack of funds is really that top barrier to entry.

It's this notion of passive acquisition, the ability to be able to acquire crypto through your everyday activities that we think is going to start to fuel the next wave of adoption. You know, as we start to bridge the accessibility of crypto, we see even small investments as a way for people to get involved. And then we know once they're involved, they continue to buy more and more.

We also know that through other work, more than 50% of those people who already own crypto would like to earn their rewards in crypto. So we see both demand and supply as starting to balance. And so it's an easy way for us to be able to offer services to break down those barriers.

Rachelle Akuffo: And it's interesting because as you say, integrating it into what people are already doing is a more accessible way for people to get into it. Just quickly, so other than the major tokens that tend to get all the buzz, your Bitcoins, your Ethereum, et cetera, which ones are flying under the radar that you think investors should keep an eye on?

GAVIN MICHAEL: So obviously, we're very focused on Bitcoin and Ether. We offer full set custody solutions in those two coins. We said at our last set of earnings that we would start to look at how we expand into more tokens because we know people want convenience and choice. We also know that some of these tokens play a greater appeal to different demographics.

So we're working right now with our regulators to be able to look at ways in which we can expand our platform, and understand how we can bring more tokens onto the platform. We'll always support several, never several hundred, but looking for those that have liquidity, good security, right reputation, good controls.

And we continue to work hard to make sure that the platform we have offers convenience and choice but doesn't move away from our foundation of safety and soundness both in terms of regulation, security, and privacy.