Dive Brief:
- Digital-asset firm BitGo has acquired NYDIG’s institutional trading business and related assets, the companies announced Thursday.
- The move is meant to give BitGo clients access to a broader range of trading and capital markets services while allowing NYDIG to focus its resources on power generation, bitcoin mining and data center development.
- Roughly 30 NYDIG employees joined BitGo as part of the deal, and NYDIG's institutional trading relationships migrated to the company, too. The value of the transaction was not disclosed.
Dive Insight:
The acquisition of NYDIG’s business highlights what BitGo labeled “growing institutional demand” for an infrastructure that supports an end-to-end digital-asset journey on one platform, encompassing custody, trading, financing, settlement and capital market services. The transaction, by BitGo’s measure, is meant to enhance the “stickiness” of assets on the platform.
“Institutions increasingly want to work with a trusted partner that can support the full lifecycle of digital assets,” BitGo CEO Mike Belshe said in a statement. “We believe this transaction will meaningfully scale our trading and infrastructure capabilities and adds an exceptional team with experience serving institutional clients. It is also expected to enable us to serve a broader base of sophisticated clients that we believe will benefit from BitGo’s comprehensive infrastructure offerings.”
The transaction also moves NYDIG’s institutional trading business to a platform that operates a bank. BitGo was among the first recent wave of digital-asset firms to get conditional approval for a national trust bank charter from the Office of the Comptroller of the Currency. However, unlike Circle, Ripple, Paxos and Fidelity Digital Assets, which received their green lights at the same time in December, BitGo said it gained full approval a day after receiving the conditional OK.
“This transaction allows our team to continue delivering the same innovative solutions, execution quality and dedication clients have come to expect, now backed by an even deeper set of resources,” Pete Janney, BitGo’s head of financial infrastructure, said in a statement.
In Thursday’s announcement, NYDIG touted the “liquidity, tailored risk management and customized trading strategies” its institutional trading business delivered for asset managers, hedge funds, corporates and family offices.
“Our team built NYDIG's institutional trading business into something exceptional: proven execution expertise with derivatives and financing capabilities,” the company’s CEO, Tejas Shah, said in a statement. “The discipline and intensity that built our trading franchise also drives our [high-performance computing] data center development business, where we see one of the most significant opportunities ahead.”
