Mike Novogratz’s Galaxy Digital Announces Acquisition of Crypto Custodian BitGo for $1.2B

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by Bhushan Akolkar · 3 min read
Mike Novogratz’s Galaxy Digital Announces Acquisition of Crypto Custodian BitGo for $1.2B
Photo: Depositphotos

Galaxy Digital will be paying BitGo shareholders a whopping $1.2 billion partly in common stock options and partly in cash. The company shall retain all employees of BitGo.

aIn a major development, crypto investment management and financial services provider Galaxy Digital Holdings announced the acquisition of popular and leading crypto custodian BitGo for $1.2 billion. This acquisition adds a feather to the cap of Galaxy Digital that seeks to offer a full-service platform for institutional players.

Earlier we’ve already reported that there were such rumors. And now they have got confirmed.

Speaking about the acquisition, Wall Street veteran and Galaxy Digital founder Mike Novogratz 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. 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.”

Formed in 2013, BitGo is one of the first regulated independent crypto custodian providers in the market. As of date, BitGo supports custody of over 400 cryptocurrencies and manages more than $40 billion worth of digital assets. It also serves more than 150 exchanges and 400 institutional clients worldwide.

BitGo’s product offering is quite complementary to that of Novogratz’s firm. Thus, it will help Galaxy Digital to emerge as a full-stack crypto solutions and service provider for institutional clients. This also broadens the spectrum of services that Galaxy Digital offers. BitGo CEO and Founder, Mike Belshe said:

“Joining Galaxy Digital represents an exciting new chapter for our business, as our current clients gain access to a wide set of financial solutions. 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 – A Feather to the Cap of Galaxy Digital

This acquisition is a big milestone for Galaxy Digital considering BitGo is a completely regulated platform. Its clients will straight away institutional-grade security offered by BitGo.

This merger between the two giants happens partly in form of stock options and partly in form of cash. Galaxy Digital will pay BitGo $265 in cash payment from its balance sheet. Besides, BitGo shareholders also get 33.8 million newly issued shares of Galaxy Digital common stock (TSE: GLXY). As per the stock price on Tuesday closing, May 4, the total deal stands at around $1.2 billion.

The press release states that BitGo shareholders get approximately 10% of the pro forma company. Besides, the merger deal notes that Galaxy Digital will retain all of BitGo’s employees. BitGo CEO Mike Belshe now joins as the Deputy CEO of Galaxy Digital. He also gets a seat on Galaxy’s board of directors.

Since executives of both companies have approved the transaction,  the acquisition will close by Q4 2021.

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