Galaxy Digital Holdings Ltd., a bitcoin-focused company, has agreed to acquire BitGo Inc. for $1.2 billion in cash and shares.
According to a Wall Street Journal article, Galaxy Digital Holdings Ltd., a Bitcoin-focused company, has agreed to purchase BitGo for $1.2 billion in cash and shares, becoming the first multi-billion dollar acquisition in the cryptocurrency business. The transaction also coincides with a boom of demand and a nearly year-long rally in the cryptocurrency industry, which has seen its market cap rise over $2 trillion in recent months.
Galaxy Digital will control more than $40 billion in assets.
According to the study, Galaxy Digital will become a crypto-focused financial services company with more than $40 billion in assets under control due to the BitGo acquisition. Trading, custody and wealth management, investment banking, prime financing, tax services, and even a mining business will be offered by the combined crypto-based firm, primarily targeting institutional investors. “For crypto to become this disruptive transformation,” Galaxy founder and CEO Michael Novogratz said, “you’re going to need larger firms that are going to bang heads against the bigger businesses” of conventional finance.”
The transaction will be the biggest in the crypto industry to date.
According to Dealogic, the deal will be the biggest takeover in the crypto market to date, besides firms going public through special-purpose investment companies or SPACs. According to the CEO, the BitGo purchase aims to make Galaxy Digital a big player in the race to draw institutional and individual buyers. Galaxy Digital will pay $265 million in cash and issue 33.8 million new shares to complete the transaction. Both companies’ boards of directors have accepted the deal, scheduled to close in the fourth quarter. BitGo owners will own around 10% of the new company.