Wall Street analysts see bitgo acquisition potential rising as banks push deeper into crypto

As traditional finance accelerates its move into digital assets, growing speculation around a potential bitgo acquisition is drawing fresh attention from Wall Street analysts.

Wall Street eyes BitGo as a strategic crypto gateway

Wall Street analysts argue that BitGo‘s expansion into full-service institutional crypto finance could unlock substantial long-term growth. Moreover, they believe the company is increasingly positioned as a prime acquisition candidate for large banks and brokers seeking a fast entry into digital assets.

Compass Point analyst Ed Engel, who maintains a buy rating on the stock, wrote that BitGo’s expanding services could prove highly attractive to traditional firms eager to offer crypto products to their clients. That said, he stressed that investors may be underestimating the firm’s broader strategic value.

“We … view BTGO as an ideal M&A target for Wall Street companies expanding into crypto. BitGo offers a full suite of services that could be integrated into traditional prime brokers and new entrants could acquire BitGo to provide these solutions to clients,” Engel wrote in a research note.

From custody specialist to full-service institutional platform

BitGo was among the first digital asset companies to go public in January, focusing on custody and security services primarily for institutional clients. The IPO gave public equity investors rare direct exposure to crypto infrastructure, effectively positioning BitGo as a bridge between traditional finance and digital assets.

The firm’s platform supports institutional-grade storage, security, and transaction services. However, analysts say the real upside lies in its ability to evolve into a more comprehensive institutional finance provider as more banks and brokers deepen their crypto strategies.

Engel highlighted that the market remains overly focused on BitGo’s core custody business, rather than its “opportunity to cross-sell prime services.” According to his analysis, investors may be overlooking how the company could bundle custody with trading, financing, and other capital markets functions for institutional clients.

Revenue upside from prime-style services

In his comparison, Engel pointed to prime brokerage-style offerings from rivals Galaxy (GLXY) and Coinbase (COIN). Moreover, he noted that Galaxy’s average revenue per trading counterparty is “~6x BitGo’s, implying significant upside” for BitGo if it can scale its own institutional trading and financing services.

This potential to cross sell services sits at the center of the bullish thesis. If BitGo can narrow the gap with these larger competitors in areas such as treasury management, execution, and lending, analysts believe its revenue base could expand meaningfully over time.

Furthermore, some market observers argue that the company’s early-mover status in regulated custody gives it an edge as institutional demand for integrated crypto prime solutions grows.

Analysts highlight BitGo’s competitive moat and M&A appeal

The company’s perceived edge and takeover potential are not limited to a single brokerage. Another Wall Street investment bank, Canaccord Genuity, echoed the view that BitGo’s positioning could be highly attractive to major financial institutions.

“We believe BitGo’s competitive moat is solid, but more importantly we believe the company could make an attractive time-to-market asset for major Tradfi players looking to enter this market in an expedited manner,” Canaccord wrote. The firm set a $15 price target along with a buy rating on the stock.

This view underscores why a potential bitgo acquisition is increasingly part of Wall Street’s discussion, especially as banks seek ready-made crypto platforms rather than building in-house systems from scratch.

History of deal talks and valuation reset

BitGo’s acquisition potential also has historical precedent. In May 2021, Galaxy Digital agreed to buy the company for $1.2 billion. However, Galaxy later walked away from the transaction, saying BitGo failed to provide required financial statements by a deadline at the end of July.

With BitGo now a public company, those transparency concerns may be less relevant. Moreover, its current valuation brings it closer to the level implied by the aborted Galaxy transaction, potentially making it more palatable for new suitors.

The January IPO priced shares at $18, valuing the firm at about $2 billion. After a sharp pullback, BitGo’s market capitalization has dropped to roughly $1.24 billion, much nearer to the earlier proposed deal value.

Share price under pressure amid broader crypto selloff

Since the IPO, BitGo’s stock has fallen more than 40%, sliding from the $18 offer price to around $10.26. The decline has outpaced the broader crypto sector, even as digital assets have faced a challenging year.

Over the same period, bitcoin has dropped about 24% year-to-date, Galaxy shares are down roughly 9%, and Coinbase has tumbled nearly 30%. However, analysts argue the steeper decline in BitGo reflects an overreaction rather than a fundamental deterioration in its business prospects.

Canaccord wrote that “BTGO shares… have reacted much more severely than any shorter term P&L trajectory weakness might warrant,” defending the name despite the recent volatility. That said, the bank believes the reset could create a more attractive entry point for long-term investors and potential corporate buyers.

Analyst consensus remains bullish

Despite the stock’s slide, coverage from Wall Street remains notably positive. According to FactSet data, BitGo currently has 10 analysts following the stock, with nine assigning buy ratings and just one rating it a hold.

Price targets range from $12 to $18 per share. Moreover, these estimates suggest potential upside of roughly 17% to 75% from recent trading levels, assuming the company can execute on its expansion strategy and capitalise on institutional demand.

Analysts also highlight BitGo’s strategic value for banks and brokers entering crypto. For these firms, acquiring an established infrastructure player could significantly accelerate time to market while reducing operational and regulatory complexity.

Outlook for BitGo and potential suitors

Looking ahead, BitGo’s trajectory will likely hinge on its success in scaling higher-margin institutional services alongside its core custody offering. However, the company’s established infrastructure, regulatory footprint, and institutional client base continue to underpin its appeal.

As traditional finance deepens its involvement in digital assets, BitGo’s role as a turnkey platform for banks, brokers, and asset managers may become even more valuable. Moreover, if crypto markets stabilise and capital flows return, both its earnings power and M&A profile could strengthen further.

In summary, analysts see BitGo as a rare listed crypto infrastructure play with a solid business foundation, meaningful revenue upside, and clear strategic relevance for would-be acquirers across Wall Street.