Novogratz’s Galaxy Buys BitGo in $1.2 Billion Crypto Deal

Mike Novogratz’s Galaxy Digital Holdings agreed to buy crypto custodian BitGo Inc. in a cash and stock transaction valued at about $1.2 billion.

Galaxy is paying $265 million in cash and is issuing 33.8 million shares to finance the acquisition. BitGo shareholders will own 10% of the company. The deal broadens Galaxy’s offerings and geographic reach.

“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,” Novogratz, Galaxy’s New York-based chief executive officer and founder, said in a statement.

Novogratz’s Galaxy Buys BitGo in $1.2 Billion Crypto Deal

Cryptocurrency prime broker BitGo was founded in 2013 by Mike Belshe, an engineer who’s previously worked on Google’s Chrome. He’s joining Galaxy as deputy chief executive officer and will become a member of the company’s 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 release.

BitGo, with over 400 institutional clients, has more than $40 billion in assets under custody and serves over 150 exchanges, according to a press release. The company processes roughly 30 billion transactions per month and supports the custody of more than 400 coins and tokens.

“We’ve built this company where we invested in all things blockchain, we traded and participated on top of the blockchain, and now with the 60-plus blockchain engineers, we actually get to build the infrastructure of the future,” Novogratz said in an interview on Bloomberg Television.

It’s the second high-profile acquisition in the crypto space in recent days. Coinbase Global Inc., the newly public crypto firm, at the end of April acquired Skew, a data analytics and trade execution platform focused on cryptocurrency derivatives.

The cryptosphere has grown in recent months as institutional and retail investors take a greater interest amid a red-hot rally in digital-asset prices. Bitcoin, the largest digital coin, has gained more than 500% over the past year. The Bloomberg Galaxy Crypto Index, which tracks multiple cryptocurrencies, is up nearly 800% over the same period.

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