The IPO, the first by a digital asset firm this year, values BitGo at $2.08 billion, Reuters reported Thursday (Jan. 22). That’s higher than the $1.96 billion the company said it was targeting earlier this month.
The Reuters report characterizes the IPO as arriving at a fraught time for the crypto sector. American lawmakers are at work on a market structure bill that would outline boundaries between securities and commodities oversight, while crypto companies warn it could hinder their business.
At the same time, the industry has been rocked by a steep selloff in October, the report added. That has increased the threshold for investor support and made it harder for companies to tap into capital markets.
BitGo’s debut, Reuters argued, offers a litmus test for other companies looking to go public this year, including digital asset-focused asset manager Grayscale and crypto exchange Kraken.
Crypto companies Circle and Figure listed last year in a much friendlier environment, the report added, and enjoyed a big boost in their initial trading sessions.
PYMNTS wrote last fall about the importance of crypto custody as digital assets move further into the financial mainstream.
“Before blockchain, the act of trusting in the digital world always relied on intermediaries. Banks verified balances, governments issued currency and auditors reconciled ledgers. Blockchain inverted that logic,” the report said. “By distributing identical copies of a ledger across thousands of computers, it eliminated the need for a single trusted recordkeeper. Instead, trust became an emergent property of the system itself, enforced by consensus, transparency and computation.
That new trust paradigm, PYMNTS said, ushered in a whole new industry. But as the crypto world expanded from a few thousand hobbyists to a multitrillion-dollar market, it was faced with the simple fact that the human and institutional world still requires custody.
While digital assets live on a blockchain, corporations, institutions and governments need to still “decide who holds the keys,” the report continued, with the question of crypto custody leading to a bifurcation of the crypto landscape.
“On one side are the self-custodians, or users and protocols that hold their own keys and trust the blockchain’s code,” the report added. “On the other are the custodial intermediaries, such as exchanges, wallet providers and regulated custodians, that reintroduce the very structures blockchain was designed to bypass. Ironically, many of the largest players in crypto, from Coinbase to Binance, now function as centralized custodians in all but name.”
