Galaxy Digital has acquired BitGo for a whopping 1.2 billion dollars. In a press release issued on Wednesday 5 May, the head of Galaxy Digital announced the official purchase of BitGo.
The purchase is being made in cash and multiple shares, totalling the staggering sum. More precisely, shareholders will receive 265 million dollars in cash. But they will also receive 33.8 million GLXY shares, owned by Galaxy Digital, a relief for BitGo’s CEO, who had been looking for a buyer for many months.
The company had begun negotiations with online payments giant Paypal. Although these negotiations began in October 2020, they were ultimately unsuccessful. The acquisition will be made official in the fourth half of this year. As a result, Galaxy Digital shareholders will be able to own almost 10 per cent of BitGo.
BitGo, the leader in financial investments
BitGo was founded in 2013 by Mike Belshe and Ben Davenport. In a nutshell, BitGo has 400 institutional clients and around 150 crypto transactions. It also holds 40 billion in assets and processes 30 billion transactions a month. The aim of BitGo’s founder is to reach a multitude of wealthy investor clients, companies and institutions. Mike Belshe will also be joining Galaxy Digital as deputy CEO and a member of the company’s board of directors. BitGo has already been working with An Ty for more than two years on mapping and many other aspects of the company. BitGo would be one of the first regulated consignors in the cryptocurrency world.
BitGo wallets
The special feature of BitGo and its security system concerns its wallets. BitGo wallets have the advantage of being able to store and protect almost 12 different cryptocurrencies. So it’s not limited to Bitcoin, as most of its competitors do. However, its system is not the best on the market, as BitGo only offers an online version of its wallets. On the other hand, these digital wallets can also exchange cryptocurrencies.
The proud owner: Galaxy Digital
Its activities
Founded in 2006, this successful company aims to become a complete, high-performance service platform for institutions. As an investment manager, it focuses on trading, principal investments, asset management and advisory services. Galaxy Digital is a company that offers its services in three major technological and financial sectors.
These are cryptocurrencies, digital assets and blockchain technology. In terms of investments, the successful company invests in the entire capital structure. But also in cryptocurrencies, whether they have large or small capital. It also provides counterparties with access to the digital asset space. Throughout a transaction, Galaxy Digital guarantees access to a range of investment banking services.
Galaxy Digital’s smart buy
Pleased with his new acquisition, the company’s founder and CEO Mike Novogratz said, “The acquisition of BitGo makes Galaxy Digital a one-stop shop for institutions and significantly accelerates our mission to institutionalise digital asset ecosystems and blockchain technology.” By acquiring the company, Galaxy Digital includes almost 400 net new customers worldwide. This is possible thanks to the many new business lines that will soon be launched by the company. This very expensive acquisition could be beneficial for the company in the long term. Customers will have easy access to a whole range of financial solutions.
On its way to Wall Street?
The company’s plans don’t stop there. In fact, Galaxy Digital has already been listed on the Canadian stock exchange for just 6 months and the results are up to scratch. But the company is thinking ahead. In the coming months, it hopes to be officially listed on the New York Stock Exchange. To this end, the company’s Board of Directors has approved a proposal to adapt and revise its operation.
The proposed changes are intended to help Galaxy Digital achieve its goal of listing on the main American stock exchange. The two companies, BitGo and Galaxy Digital, are already giants in their respective sectors. There is no doubt that together they could form a real competitor in the cryptosphere, and on an international scale.
The idea of Galaxy Digital and Satoshi
Even more recently, the CEO of the large company Galaxy Digital spoke out on Twitter. On Monday 10 May, Mike Novogratz said that he would like to be part of an even bigger change in the world of cryptography. He places particular emphasis on the way Bitcoin exchanges are handled. The CEO is proposing a solution to change the way consumers perceive the dollar value of Bitcoin.
Novogratz suggests reducing the units in satoshis (SATS) in the same way as the full units of BTC. However, none of the major cryptocurrency exchanges have yet implemented this measure. So we wonder who will pioneer this great innovation. Other companies, such as Lolli, are also seeking to valorise smaller units of value for simplified use.
The origins of Satoshi
Satoshi is the name given to the smallest unit of the Bitcoin blockchain protocol. It was so named because it is also the pseudonym given to the anonymous person(s) who created Bitcoin. From a theoretical point of view, the value and presence of this small unit are only momentary and may well change or even disappear. From a technical point of view, 1 SATS is currently equivalent to 0.00000001 BTC. On the other hand, 1 BTC is equivalent to 100 million Satoshi. But you may have already come across Satoshi under the name Sat or sat.
The consequences
The use of sat instead of BTC should, fortunately, not alter the course and finances of the currency and blockchain in vogue. However, changing the name of these units could well have a significant psychological impact. Indeed, the co-founder of the Blockchain Research Lab, Ingo Fiedler, expressed his concern, stating that “even if financially it makes no difference to change the denomination from BTC to Sats, it has a psychological impact that probably contributes to later adoption”. Bitcoin’s popularity among companies, investors and individuals is at an all-time high. Therefore, consumers should not turn to other currencies and abandon Bitcoin because of a name change.
In addition, it could confuse the many newcomers to the cryptocurrency market, who might have difficulty finding BTC. In fact, while searching for BTC/Bitcoin, they may come across SATS/Satoshi without even knowing what it means. Fortunately, this is all just conjecture on the part of Galaxy Digital’s founder. It just goes to show that the world of cryptocurrencies is constantly evolving. The more it attracts, the more innovations need to be put in place to ensure that it works better and guarantees its future.
