Crypto custodian BitGo is emerging as a potential acquisition target for major Wall Street firms, according to analysts who argue that the company’s expanding institutional infrastructure strategy could offer long term strategic value despite a weak stock market debut.
BitGo went public in January, giving equity investors direct exposure to digital asset custody and security services tailored primarily to institutional clients. Since its initial public offering at $18 per share, the stock has declined more than 40% and recently traded near $10.26. The pullback has occurred alongside broader weakness in crypto related equities and a year to date decline in bitcoin prices, contributing to cautious sentiment around listed digital asset firms.
However, analysts at Compass Point and Canaccord Genuity maintain positive ratings on the stock, viewing the selloff as disproportionate to the company’s structural positioning. They point to BitGo’s push beyond core custody into a broader suite of institutional services that resemble prime brokerage offerings in traditional finance.
Compass Point notes that BitGo’s platform could appeal to banks and financial intermediaries seeking a faster entry into digital assets without building in house infrastructure. By offering custody, settlement, staking and other institutional services under one framework, BitGo may provide a ready made solution for traditional prime brokers expanding into crypto markets. Analysts also highlight potential upside from cross selling higher margin services to existing custody clients.
Comparisons have been drawn with competitors such as Galaxy and Coinbase, particularly in prime brokerage style revenue generation. Analysts observe that revenue per trading counterparty at larger peers remains significantly higher than BitGo’s, suggesting room for monetization growth if service adoption broadens. The argument centers on the idea that the market may be undervaluing BitGo’s ability to deepen relationships with institutional clients rather than relying solely on custody fees.
Canaccord Genuity similarly describes BitGo as an attractive time to market asset for traditional finance players. With regulatory clarity improving in several jurisdictions and institutional crypto adoption continuing to evolve, acquiring an established infrastructure provider could accelerate strategic expansion for banks, asset managers or fintech firms.
The company’s acquisition narrative is not without precedent. In 2021, Galaxy Digital agreed to acquire BitGo for $1.2 billion, though the transaction was later terminated. At current share prices, BitGo’s market capitalization has moved closer to that earlier valuation level, potentially renewing speculation about strategic interest from larger financial institutions.
Despite market volatility, analyst coverage remains broadly supportive. Of the ten analysts following the stock, the majority hold buy ratings, with price targets ranging from $12 to $18 per share. This implies potential upside from current trading levels, assuming stabilization in broader crypto markets.
As institutional demand for secure custody and integrated digital asset services grows, BitGo’s positioning at the intersection of traditional finance and blockchain infrastructure continues to draw attention from both investors and potential strategic partners.
