NextFin News - BitGo Holdings Inc. wants prime brokerage to become the whole of its business, not one revenue line among custody, settlement and wallet services. In an interview in Singapore on October 6, co-founder and Chief Executive Mike Belshe set the target in unambiguous terms:
"We would like it to be 100% of our revenue. We want to help you make money rather than be a cost center. Nobody wants to pay for custody. We don't want to charge you for custody."
The ambition reframes the first year of BitGo's life as a public company. The crypto custodian listed on the New York Stock Exchange in January at $18 a share, above its marketed range of $15 to $17, raising roughly $213 million at a valuation near $2 billion under the ticker BTGO. The pitch then was custody, compliance and infrastructure - the steady, cycle-resistant plumbing of the digital-asset economy. Nine months later, BTGO trades around $7.38, down about 59% from the IPO price, with a market capitalization of roughly $865 million against a 52-week range of $4.65 to $24.50. The multiple-expansion story that accompanied the listing has not held, and Belshe's answer is to stop selling safekeeping and start selling the ability to put assets to work.
This is a structural bet, not a cyclical one. Custody is becoming free because it has become a commodity - a table-stakes service bundled into broader platform relationships by exchanges, trading desks and wallet providers that monetize the flow custody enables rather than the vault itself. Prime brokerage, by contrast, is where assets generate spreads on financing, fees on securities lending, commissions on execution and revenue on settlement - and where a client that borrows against its portfolio becomes a client that cannot easily leave. Belshe's "100% of revenue" line is therefore not merely a growth target; it is a statement about lock-in. The firm that finances an institution's positions owns the relationship; the firm that only stores them is one pricing conversation away from being replaced.
The Build-Out: Buying Capability, Not Just Building It
BitGo is not starting prime brokerage from scratch. On March 31, 2026, BitGo Prime, a subsidiary, launched a unified on-platform financing offering that bundles collateralized borrowing, lending, collateral management and monitoring into a single solution. The stated objective: eliminate the need for institutions to juggle multiple counterparties, manual processes and collateral movements across venues. The technology backbone predates the launch - in February 2025, BitGo partnered with Membrane Labs to power its prime services, integrating loan-management software that Membrane says facilitated more than $3 billion in bookings the prior year.
More significantly, BitGo has been buying the pieces it needs. On August 27, 2026, the company completed its acquisition of NYDIG's institutional trading business, adding derivatives, structured products, financing and other capital-markets services to its custody, settlement and wallet infrastructure. According to a person close to the matter, roughly 30 NYDIG employees and about 250 institutional client relationships moved to BitGo with the deal. BitGo did not disclose terms at the announcement; secondary reports have placed the consideration in the range of roughly $42.5 million to $57.5 million, with a portion structured as stock and performance-based earnouts. For NYDIG, the sale allows a shift of resources toward power generation, bitcoin mining and high-performance computing data-center development, with a pipeline exceeding 3 gigawatts.
The NYDIG acquisition is the clearest signal yet that Belshe is executing the prime-brokerage pivot through acquisition as well as organic development. Derivatives and structured products are not adjacent to prime brokerage; they are its core. A prime broker that cannot offer financing against a diversified collateral pool, or structured exposure tailored to a hedge fund's mandate, is not a prime broker at all - it is a custody account with a trading screen. The deal also hands BitGo a book of 250 institutional relationships that can be cross-sold the financing platform, which is precisely the attach-rate dynamic the "100% of revenue" target requires.
The company's underlying footprint gives the strategy a plausible foundation. As of March 31, 2026, BitGo served more than 5,500 clients in over 100 countries, and as of the first quarter it covered 186 of the top 250 digital assets by market capitalization - more, the company says, than the next-closest institutional providers, at 134, 134 and 121 respectively. BitGo describes itself as the largest independent digital asset custodian, with more than $100 billion in digital assets on its platform and responsibility for approximately 20% of all on-chain bitcoin transactions by value. If even a modest fraction of that custody base activates financing, revenue per client could expand without new customer acquisition - the second-order effect that the current share price does not reflect.
Why Custody Cannot Carry a Public Valuation
Belshe's diagnosis is the crux of the pivot, and it is hard to dispute. "Nobody wants to pay for custody," he said - and the market has been moving in that direction for years. As digital-asset custody matured from a scarce specialty into an industrial utility, explicit custody fees compressed. The service became something clients expect to be bundled, discounted, or free, because every major venue offers it as a loss leader for the activities that actually generate revenue.
For BitGo, the pressure is compounded by its own corporate history. The company was nearly acquired by Galaxy Digital in a transaction valued at $1.2 billion, announced in May 2021 and terminated in August 2022 after BitGo did not deliver requested audited financial statements by the due date; Galaxy paid no termination fee, and BitGo subsequently said it would seek more than $100 million in damages, calling Galaxy's actions improper. The abandoned deal left BitGo as a standalone public company without the balance sheet of a larger crypto merchant bank behind it - a meaningful disadvantage in a prime-brokerage business where the ability to warehouse risk and extend credit is the core product. Galaxy, for its part, continues to offer trading, lending and liquidity solutions to institutions and has integrated with custodians including BitGo for staking infrastructure - a reminder that in this market, a suitor can become a partner, and a partner a competitor.
There is also a reputational dimension to the custody franchise that prime brokerage can help offset. BitGo was the sole custodian of the bitcoin backing wrapped bitcoin, or WBTC, from the token's 2019 launch until August 2024, when custody moved into a multi-jurisdictional joint venture with BiT Global, an entity with ties to Tron founder Justin Sun. The change drew scrutiny: Coinbase delisted WBTC citing listing concerns, and the Sky protocol debated offboarding the token before discussions with Belshe persuaded it to pause. WBTC remains the largest wrapped bitcoin by supply, in the $10 billion range as of mid-2026, but the episode underscored how a custodian's franchise value can be entangled with governance controversies that have nothing to do with the security of the underlying keys. Prime brokerage offers a cleaner narrative: revenue tied to client activity and capital efficiency rather than to custody mandates that can be politicized.
The Competitive Field Is Already Crowded - and Larger
BitGo is not entering an empty market, and this is the hardest part of Belshe's thesis. The crypto prime-brokerage landscape has consolidated rapidly, and the incumbents are larger, better funded, and in some cases already public. Coinbase Prime, the institutional arm of the largest US crypto exchange, holds more than $350 billion in assets under custody - a base more than 400 times BitGo's entire market capitalization - and serves as custodian for more than 80% of US spot bitcoin and ether exchange-traded fund assets. Coinbase bundles trading, custody, financing, derivatives and cross-margining into a single stack, and its institutional chief has said cross-margining reduces client capital needs by 10% to 20%. Coinbase also runs a lending book reported at around $1 billion.
Beyond Coinbase, the field includes FalconX, which filed confidentially for an initial public offering in 2026 at a reported $8 billion valuation - roughly nine times BitGo's current market cap - offering execution, financing and swap-dealer regulation. Ripple acquired Hidden Road, a crypto-native prime broker, for $1.25 billion in 2025. Clear Street, a cloud-native prime broker valued at about $12 billion, launched digital-asset OTC spot execution for bitcoin, ethereum and solana in March 2026. Matrixport introduced Phoenix Prime, aggregating spot and derivatives liquidity from Binance, OKX and Bybit. Even traditional finance is blurring the boundary, with cloud-native brokers extending into digital assets.
Against this field, BitGo's differentiator is not scale - it cannot win a scale war - but neutrality. Coinbase Prime is formidable, but it is owned by BitGo's largest potential competitor in custody and trading. For institutions that do not want their prime broker, custodian and trading venue to be the same company, BitGo offers an unbundled alternative. That is a real niche, but it is a niche defined by caution rather than by growth momentum, and niches rarely produce a "100% of revenue" outcome without significant share capture from incumbents.
What the Market Has Priced In - and What It Has Not
The market's current verdict on BitGo is visible in the shares. Trading near $7.38, the stock prices the company as a custody utility with limited growth optionality, not as a future prime-brokerage leader. The decline from the $18 IPO price implies that investors have largely written off the multiple-expansion story that accompanied the January listing, and are waiting for evidence that the financing platform is translating into revenue rather than press releases.
But that pessimism may itself be the setup. The "100% of revenue from prime brokerage" target is, in practical terms, a statement that BitGo intends to grow the financing and trading book far faster than the custody book - or, alternatively, to reprice custody toward zero and monetize everything that flows from it. The NYDIG acquisition is the mechanism: 250 institutional relationships, derivatives and structured-product capability, and financing expertise folded into a platform that already touches more than 5,500 clients. If the attach rate - the share of custody clients using prime services - rises materially over the next four quarters, revenue per client expands without proportional customer-acquisition cost, and the custody-utility multiple becomes a mispricing rather than a judgment.
The risk is that the financing business requires what custody does not: balance-sheet risk. Lending against crypto collateral means taking exposure to collateral volatility, margin calls and counterparty defaults - the exact risks that destroyed crypto lenders in 2022. BitGo's unified platform is designed to manage that risk on a portfolio basis rather than position by position, and the company's public-company compliance footprint is a discipline that private lenders lacked. But no risk-management architecture is immune to a disorderly market, and the 2026 financing build-out is a bet not only on demand but on the absence of a systemic shock.
The Counter-Thesis: Prime Brokerage Is a Scale Game, and BitGo Is Undercapitalized
The strongest argument against Belshe's strategy is the simplest: prime brokerage is among the most capital-intensive businesses in finance, and BitGo is the smallest serious contender in the room. A prime broker's value to a hedge fund is its ability to provide leverage, securities lending and balance-sheet warehousing at competitive rates - all of which scale with the size of the broker's own capital and funding costs. Coinbase Prime's $350 billion custody base, FalconX's reported $8 billion valuation, and Ripple's $1.25 billion acquisition of Hidden Road are not just larger numbers; they are structural advantages that compound. A smaller prime broker must charge more or lend less, and either choice loses clients to the larger players.
This counter-thesis is backed by the market's own verdict: BTGO trades at roughly $865 million, a fraction of every meaningful competitor's valuation, despite having gone public with a $2 billion price tag. Investors have effectively priced BitGo as a custody firm that will not win the prime-brokerage war. The canceled Galaxy acquisition is Exhibit A: the deal that would have given BitGo a deeper balance sheet and a merchant-banking engine was terminated in 2022, leaving the company to build prime services organically - and through bolt-on acquisitions like NYDIG - while better-funded rivals consolidate.
Belshe's answer, implicitly, is that neutrality and integration can beat scale in a fragmented market - that institutions wary of Coinbase's vertical integration will pay for an independent alternative, and that a unified financing platform can win on product quality rather than price. The falsifying signal is quantifiable: if BitGo's financing and trading revenue does not grow faster than custody revenue over the next four quarters, and if the custody attach rate does not rise materially, then the "100% of revenue" target is a slogan rather than a plan, and the stock's custody-utility multiple is justified. A secondary signal would be any disclosure of credit losses or margin-call failures on the financing book - the tell that the risk model does not survive a volatile tape.
What to Watch
The near-term catalyst is BitGo's next earnings report, scheduled for early December 2026 - market-data feeds reference December 2, though the company's investor-relations calendar should be consulted for confirmation. Investors should watch for three metrics: growth in financing and trading revenue versus custody revenue; the number of custody clients activating prime services; and any disclosure of the on-platform lending book size. The NYDIG contribution - 250 relationships and derivatives capability - should begin to appear in the revenue mix, and the market will judge whether it is accretive enough to change the narrative.
Beyond earnings, the competitive moves that would break the thesis run in both directions. On the upside: a major institutional adoption of BitGo Prime by a hedge fund or family office that publicly cites neutrality as the deciding factor; a partnership with a traditional prime broker seeking crypto capabilities without building them in-house; or a sustained market rally that expands collateral values and borrowing demand. On the downside: a crypto credit event that forces write-downs on the lending book; a price war in custody that pushes explicit custody fees to zero faster than prime revenue can replace them; or a competitor - Coinbase, FalconX, or a traditional broker entering the space - capturing the bulk of new institutional prime flow.
Time horizons matter here. In the short term, the stock remains a function of crypto-market sentiment and the December earnings print. Over the medium term, the question is whether the financing platform can demonstrate revenue traction without a blow-up. Over the long term, the structural question is whether digital-asset prime brokerage consolidates into a few scaled winners - as traditional prime brokerage did - or fragments into specialized, neutral providers. Belshe is betting on fragmentation; the market, so far, is betting on consolidation.
The Bottom Line
Mike Belshe is right about the direction of the industry: custody is becoming free, and the money in digital assets will be made by putting those assets to work. But identifying the right destination and reaching it are different challenges. BitGo's "100% of revenue from prime brokerage" target is a coherent strategy only if the company can convert its custody relationships into financing relationships faster than better-capitalized rivals can undercut it on price. The stock, down 59% from its IPO, says investors do not yet believe that conversion is happening. The December earnings report will show whether they should.
The central judgment: BitGo's pivot is strategically correct but tactically undercapitalized. Custody cannot carry a public valuation in 2026, and prime brokerage is the only credible alternative revenue engine. Yet prime brokerage rewards scale above all else, and BitGo is entering the fight with a market cap that is a fraction of its competitors'. The NYDIG acquisition is the right kind of move - buying revenue relationships and derivatives capability rather than building them from zero - but one $42.5 million deal does not close a 400-fold scale gap. The strategy will be proven right or wrong not by the ambition of the target, but by a single observable metric over the next year: whether financing revenue grows fast enough to make custody irrelevant to the profit-and-loss statement. Until that shows up in the numbers, "100% of revenue" is a destination, not a trajectory.
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