Galaxy Digital, a financial services firm focused on cryptocurrency, announced today that it has entered an agreement to purchase BitGo. The deal is valued at $1.2 billion and will be composed of 33.8 million shares of Galaxy Digital and approximately $265 million in cash. The purchase price is much higher than the reported $750 million PayPal offered for BitGo earlier this year.
Cryptocurrency has exploded in recent years and has picked up even more steam in the last 12 months. Galaxy Digital hopes to capitalize on that by developing a merchant bank targeted specifically towards the cryptocurrency market and its participants. BitGo, which offers bitcoin wallet services, will help Galaxy Digital build out its custodial management arm and provide more services to clients.
Galaxy Digital is also pursuing talent through this acquisition. By acquiring BitGo’s developers, and its blockchain team in particular, Galaxy Digital hopes to increase its ability to compete in an increasingly talent-scarce industry.
Institutions like Goldman Sachs and J.P. Morgan are also known to be looking for developers as they dip their toes into cryptocurrency, so Galaxy Digital may be trying to lock in its own talent before larger institutions can.