Galaxy Digital rumored to acquire BitGo, aiming to expand into DeFi and crypto custody space?

With Bitcoin (BTC) officially entering Wall Street as an asset allocation, providing Bitcoin (cryptocurrency) related services has become a battleground, and one of them is "custody business." According to foreign media "CoinDesk," citing four well-known sources, it is reported that Galaxy Digital, known as a cryptocurrency investment bank, is in negotiations to acquire custody provider BitGo.

The Hot BitGo in Demand

Last month, BitGo obtained a trust license from the New York Department of Financial Services (NYDFS), allowing it to provide cryptocurrency custody services for large institutions. This means that Wall Street can now start using BitGo to trade and custody cryptocurrencies.

Industry insiders estimate that there is still room for growth in Bitcoin custody of up to 8 million coins. Following Coinbase's pricing model of a 0.5% (50 bps) annual custody fee, the total annual custody fee for 8 million bitcoins would be around $220 million, indicating a significant potential market.

Not only Galaxy Digital expressed interest in acquiring BitGo, but at the end of last year, PayPal, which had just started offering cryptocurrency trading, was also rumored to be in talks to acquire BitGo. However, the deal eventually fell through.

At that time, BitGo CEO Mike Belshe only stated that BitGo had been in negotiations with various parties, emphasizing that the company was not willing to accept an acquisition at such a low valuation.

Currently, BitGo has raised a total of $69.5 million in the first six rounds of financing.