Mike Novogratz's Galaxy Digital buys crypto start-up BitGo in industry's first billion-dollar deal
- Mike Novogratz's Galaxy Digital is set to acquire BitGo for $1.2 billion in cash and stock.
- The deal comes as the total value of the cryptocurrency market soars to $2 trillion.
- The merger will position Galaxy as a crypto-focused financial services firm offering storage, trading, asset management, tax services, and more for institutions.
Galaxy Digital Holdings announced Wednesday it has agreed to acquire BitGo, a digital asset infrastructure provider start-up for $1.2 billion in cash and stock. The acquisition is the first $1 billion deal in the cryptocurrency industry.
The acquisition of BitGo will position Mike Novogratz's Galaxy Digital as a crypto-focused financial services firm offering asset storage, trading, asset management, tax services and a mining operation, primarily for institutional investors seeking access to crypto. It comes as the crypto sector's entire market value soars to $2 trillion.
"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 Novogratz, the Galaxy Digital CEO and Founder in a press release.
San-Francisco-based BitGo was founded in 2013 as a digital-assets custodian service. It now offers prime lending, tax services, and trading and portfolio management. The company has over $40 billion of assets under custody, over 400 institutional clients, and processes over 30 billion monthly transactions.
The transaction is expected to close in the fourth quarter of 2021. According to The Wall Street Journal, the deal is the largest acquisition to date in the crypto sector excluding companies that have gone public via SPACs.
Galaxy is paying $265 million in cash and issuing 33.8 million new shares. BitGo shareholders will own 10% of the new company.
Galaxy Digital trades on the Toronto Stock Exchange with a market capitalization of nearly $3.26 billion, per Yahoo Finance data.