This week, Galaxy Digital, a crypto-focused fintech company based in NYC, announced it will be acquiring BitGo, a Bay Area startup offering digital asset financial services, for $1.2 billion in stock and cash. This is the first $1 billion deal in the history of cryptocurrency, according to The Wall Street Journal, which makes it the industry’s largest acquisition to date (excluding SPACs).
Galaxy Digital helps its customers manage their investments in the digital assets, cryptocurrency and blockchain technology sectors. The company was founded in 2018 and, in that same year, had an IPO on the Toronto Stock Exchange. Now, the company says it plans to “undergo a domestication process,” and is preparing for a public filing here in the U.S. later this year.
Meanwhile, BitGo was founded in 2013 as the first independent digital assets custodian service, according to the company. It now offers prime lending, trading, portfolio management and tax services, with more than $40 billion of assets under its custody. Serving more than 150 exchanges and some 400 institutional clients, BitGo claims to process more than 30 billion monthly transactions and support the custody of more than 400 coins and tokens, providing its clients with insurance as well.
Under the terms of this latest deal, Galaxy Digital will pay BitGo shareholders 33.8 million new shares of its common stock and about $265 million in cash. The newly combined company will offer a suite of products and services, including custody and asset management, investment banking, trading, and mining operation — mainly targeting institutional investors. BitGo’s CEO Mike Belshe will join as Deputy CEO of Galaxy Digital and become a member of its board of directors.
“Joining Galaxy Digital represents an exciting new chapter for our business, as our current clients gain access to a wide set of financial solutions,” Belshe said in a statement. “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.”
This is a pretty good deal for Galaxy Digital, too. The company says the acquisition will make it the first full-service financial platform for digital assets out there, and leaves it poised to be a major player in this space. Galaxy Digital was also listed among Built In NYC’s 50 startups to watch last year.
“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,” Galaxy Digital’s founder and CEO Mike Novogratz said in a statement. “The power of 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.”
This transaction has been approved by the boards of directors of both Galaxy Digital and BitGo, and is expected to close by Q4 of this year, subject to approval by Galaxy Digital’s shareholders.
