Bakkt stock got a boost Monday after the company announced a partnership with Mastercard that will enable Mastercard’s network of banks, merchants, and fintechs to integrate cryptocurrency services into their products, allowing more consumers to use crypto for purchases.
Shares of Bakkt Holdings, the digital asset platform that went public via a SPAC (or special purpose acquisition company) last week, were up more than 100% in early afternoon trading on Monday, at which point trading was halted amid exceptionally high volume. The stock surge came after the two companies announced in a news release that any of Mastercard’s vast ecosystem of banks and merchants in the U.S. will be able to issue branded crypto debit and credit cards and enable consumers to buy, sell, and hold digital assets through custodial wallets supported by Bakkt. Mastercard customers will also be able to offer consumers the ability to earn and spend rewards points in cryptocurrency in lieu of loyalty points and convert their crypto to pay for purchases.
The partnership “extends Mastercard’s ecosystem of cryptocurrency partners enabling Crypto-as-a-Service, which provides quick access to cryptocurrency capabilities,” according to the release. CNBC first reported on the partnership.
Bakkt, born out of NYSE parent Intercontinental Exchange, lets consumers manage and spend cryptocurrencies, rewards points from hotels and airlines, and gift cards. The firm also facilitates payments for merchants who want to enable their customers to use crypto.
Interest in cryptocurrencies has been rising in recent months, and stalwart crypto Bitcoin hit all-time highs earlier this month. According to a Bakkt U.S. Consumer Crypto Survey, nearly half of the 2,000 U.S. consumers surveyed reported buying some form of cryptocurrency in the first half of 2021.
Meanwhile, companies are increasingly adding options for consumers to use cryptocurrencies to buy things. “As brands and merchants look to appeal to younger consumers and their transaction preferences, these new offerings represent a unique opportunity to satisfy increasing demand for crypto, payment, and rewards flexibility,” Nancy Gordon, executive vice president of loyalty rewards and payments at Bakkt, said in the news release.
Mastercard itself has been getting more deeply involved with crypto, recently agreeing to acquire CipherTrace, a firm that analyzes blockchains for illegal transactions.
But the use case for crypto (in particular, Bitcoin) as a currency to purchase goods and services continues to be in flux.
“We have holders of Bitcoin who believe it makes zero sense to use it for purchases, simply because many of those who are holding it at these levels believe it’s going to be trading at $100,000 to $200,000-plus, and the last thing you want to do is look back at that time in 2021 when you used your Bitcoin to buy a cup of coffee,” Mark Palmer, a fintech and cryptocurrency analyst at investment firm BTIG, told Fortune in July.
“One of the big questions that needs to be addressed is the extent to which holders of crypto are even interested in participating in commerce,” Palmer added.
With partnerships like Bakkt’s and Mastercard’s, we’re bound to get more answers to that question.
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