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By Landon Manning
BitGo, a crypto asset trust and security company, has reached a tentative deal with fellow custody specialist Prime Trust to acquire this firm at an undisclosed price.
Since its founding 10 years ago, BitGo has become a major industry player, offering custody services to various crypto-related businesses across the industry. BitGo offers multisignature wallet services to private and institutional customers, as well as other services such as platform APIs and a program to “wrap” bitcoin, which uses its own tokens to encourage cross-platform asset flows from Bitcoin’s blockchain to Ethereum. The firm has had a large number of high-profile clients in the last 10 years, but the most prominent example of its value may be a thwarted 2021 deal for Galaxy Digital to acquire BitGo at a price of $1.2 billion.
The world of bitcoin retail investors is in large part held up by cryptocurrency exchanges and other smaller businesses, which often have difficulty in accessing traditional banking services. As a trust company, BitGo is not only equipped to hold on to various parties’ assets, but can also carry out functions such as lending and trading, all while protected by substantial insurance funds. In other words, asset custody firms make daily functioning possible for crypto businesses without immense capital assets.
It’s this role in the crypto ecosystem that should make investors particularly interested in BitGo’s new agreement to acquire Prime Trust, as revealed publicly through a blog post in early June. This announcement detailed a number of benefits that will result from this merger. Jor Law, Prime Trust’s interim CEO and president, claimed that, “No other company will have the breadth of product and services nor depth of experience that this combined company would have. We are excited to offer our world-class infrastructure within a broader ecosystem and revolutionize the future of crypto.”
Although the previous merger deal between BitGo and Galaxy Digital fell through, there are several signs from Prime Trust’s end that this will be completed. Since BitGo’s announcement of the deal, for example, one of Prime Trust’s subsidiary payments platforms declared bankruptcy.
With BitGo growing even stronger through this acquisition, it could open up a number of possibilities for smaller crypto-related businesses worldwide. News on this developing situation will surely present a valuable window into the whole Bitcoin economy, and it seems to show that there are good things ahead.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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