Galaxy Digital to acquire BitGo for $1.2 billion as part of process for public listing
- The acquisition of crypto custody firm BitGo will enable Galaxy Digital to become the first full-service firm for cryptocurrencies.
- The financial services firm expects to add over 400 institutional clients as a result of the purchase.
- Galaxy Digital will go through a domestication process to enable the firm to get listed later this year.
Galaxy Digital has announced its intention to acquire one of the largest cryptocurrency custody firms, BitGo, with $40 billion in assets under management.
Institutional hub for the cryptocurrency space
The financial services firm headed by Michael Novogratz has agreed to buy BitGo for $1.2 billion in stock and cash, according to the official announcement. The deal is expected to close in the last quarter of 2021. BitGo co-founder and CEO Mike Belshe will join Galaxy Digital as deputy CEO and become a member of the firm’s board of directors. Belshe said:
We will now be in a position to offer our best-in-class digital asset infrastructure capabilities to significantly more corporate, institutional and high-net-worth investor clients.
BitGo shareholders will receive $33.8 million of newly issued shares of Galaxy Digital common stock and around $265 million in cash as part of the deal. The crypto custodian shareholders will own approximately 10% of Galaxy Digital.
The New York-headquartered investment management firm will position itself as a full-service platform for institutions looking to seek access to the cryptocurrency economy. Novogratz, founder and CEO of Galaxy Digital, said:
The acquisition of BitGo establishes Galaxy Digital as a one-stop-shop for institutions and significantly accelerates our mission to institutionalize digital asset ecosystems and blockchain technology.
With the acquisition of BitGo, Galaxy Digital will gain around 400 new global clients. The financial services firm also expects to expand to the West Coast, with the addition of an office in San Francisco.
The company will undergo a reorganization and “domestication process,” which would eventually lead to a US listing later this year.
BitGo provides services in crypto custody, trading, prime lending, portfolio and tax management services. Founded in 2013, the firm serves over 150 exchanges and 400 institutional clients and has been looking for a buyer for months. Reports from last December circulated that PayPal had the intention of acquiring the firm. However, discussions fell through, and PayPal later acquired crypto custody firm Curv.
Author
Sarah Tran
Independent Analyst
Sarah has closely followed the growth of blockchain technology and its adoption since 2016.
