Galaxy Digital Acquires BitGo for $1.2B

BitGo, founded in 2013, was one of the first companies to offer institutional-grade wallets and infrastructure products long before the recent bitcoin rally made corporations eye the asset for their balance sheet.

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Michael Novogratz, CEO, Galaxy Digital

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key takeaways

  • Crypto Sees First ‘Unicorn’ Deal with Galaxy Digital Acquisition of BitGo
  • BitGo has $40 billion in assets under management with 150 exchanges and 400 institutional clients

Digital asset merchant bank Galaxy Digital announced today that it had acquired custodian provider BitGo for $1.2 billion in cash and stock 

“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,” said Mike Novogratz, CEO and Founder of Galaxy Digital in a statement.

“The power of the technology, solutions, and people we will have as a result of this acquisition will unlock unique value for our clients and drive long-term growth for our combined business. We are excited to welcome Mike Belshe and the talented BitGo team to Galaxy Digital,” he added.

According to a release the deal will be valued at $1.2 billion in a combination of cash and stock and is expected to close at the end of this year.

BitGo, founded in 2013, was one of the first companies to offer institutional-grade wallets and infrastructure products long before the recent bitcoin rally made corporations eye the asset for their balance sheet. Earlier this month BitGo announced that it had opened a $700 million insurance policy underwritten by Lloyds of London to cover digital assets in its possession.

Galaxy said it will use its balance sheet to fund the cash portion of the deal. When the deal closes, Galaxy will issue incremental shares to BitGo’s shareholders in exchange for net digital assets.

Galaxy’s stock, which trades in Toronto — also home to the world’s only active bitcoin ETFs — has nearly doubled throughout 2021 bringing its market cap to over $3.2 billion. In the release Galaxy said it plans to re-organize and relocate its corporate domicile to the US in anticipation of a New York listing. 

In a February webinar Novogratz said that Galaxy is “now making more in a day than in all of 2018.” 

“Bitcoin has gone viral and we’ve crossed the point of no return as a macro asset,” he said during the webinar.

Galaxy Digital is currently trading for approximately $34 CAD in Toronto, before the markets open. It’s stock is up approximately 16% on-month and 200% year-to-date. 

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