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Crypto's First Billion-Dollar Deal: Novogratz' Galaxy Digital To Acquire BitGo For $1.2B

May 5, 2021 12:51 pm
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Crypto's First Billion-Dollar Deal: Novogratz' Galaxy Digital To Acquire BitGo For $1.2B

Digital asset-focused investment firm Galaxy Digital Holdings Ltd. (TSX:GLXY) has announced today that it will acquire crypto infrastructure provider BitGo for $1.2 billion.

What Happened: The deal marks the crypto industry’s first billion-dollar acquisition, and with $40 billion now in assets under custody Galaxy Digital will be one of the largest in the space.

“In order for crypto to become this revolutionary transformation, you’re going to need bigger companies that are going to knock heads against the bigger businesses of traditional finance,” Galaxy Founder and Chief Executive Michael Novogratz said to The Wall Street Journal.

Under the terms of the merger, BitGo shareholders will receive 33.8 million newly issued Galaxy Digital shares and $265 million in cash and own approximately 10% of the pro forma company.

Galaxy Digital also said that it would undergo a “reorganization and domestication” in line with its objective of a U.S IPO later this year.

Why It Matters: BitGo was the first independent regulated custodian, purpose-built for digital assets in 2013.

Today, it serves over 150 exchanges and over 400 institutional clients while also supporting the custody of over 400 cryptocurrencies in the market.

See also: Novogratz's Galaxy Digital Crypto Bank Becomes The Latest Company To File For Bitcoin ETF

The custodian’s product suite complements Galaxy Digital's existing offerings across Asset Management, Trading, Investment Banking, and Mining. The two firms believe that the combined entity will be uniquely positioned to serve the entirety of clients’ evolving financial services needs.

"We will now be in a position to offer our best-in-class digital asset infrastructure capabilities to significantly more corporate, institutional, and high net worth investor clients," said BitGo CEO Mike Belshe.

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