BitGo's IPO Pricing Opens Growth Opportunities for Custody Services Amid Cryptocurrency Market Volatility

BitGo has set its IPO price at $18 per share ahead of its listing on the New York Stock Exchange (NYSE) this week. This values the company at approximately $2 billion and will begin trading under the ticker symbol BTGO. In the cryptocurrency industry, the entry of a market service company capable of profit prediction beyond market volatility into the public market is drawing industry attention.

The Significance of the $18 Price per Share

BitGo’s IPO pricing was made amid difficulties faced by cryptocurrency-related listed companies over the past six months. Looking at the stock price fluctuations of similar companies listed in the same period, Bullish, the parent company of CoinDesk, has fallen over 40%, the stablecoin infrastructure company Owlting has plummeted nearly 90%, and Gemini Space Station related to the Winklevoss brothers has declined about 70%. During the same period, the CoinDesk 20 index dropped approximately 33%, illustrating how extremely negative investor sentiment has become.

In this market environment, BitGo’s pricing is considered relatively conservative yet reasonable. Matthew Siegel, Head of Digital Asset Research at VanEck, pointed out that since BitGo focuses more on custody and staking services rather than trading-centric business, the market opportunity differs.

Stable Revenue from Custody and Staking Services

BitGo’s core competitive advantage lies in the stability of its revenue structure. Most of the company’s income comes from custody and staking services, accounting for over 80% of total revenue. These services are unaffected by trading volume volatility, generating significantly more predictable income than trading-focused businesses.

Analysts explain that a detailed analysis of the company’s financial statements can clarify its actual economic value. Net income from custody and staking is estimated to be around $160 million to $170 million annually, while trading-related net income is only in the millions of dollars. This fundamentally differs from trading-centric companies like Coinbase or Galaxy Digital.

Growth Outlook Through 2028

According to VanEck’s analysis, BitGo is expected to generate over $400 million in revenue and over $120 million in EBITDA by 2028. If this growth materializes, a valuation significantly higher than the current IPO valuation of $2 billion could be justified.

This indicates that investors are paying attention to the long-term growth potential of custody and staking services. The new business segment of stablecoin services is still in its early stages but is seen as another growth opportunity in the future.

Amid a market heavily influenced by cryptocurrency trading volatility, BitGo has entered the public market based on predictable custody service revenues. Attention is focused on whether this IPO pricing can set a new direction for the cryptocurrency industry.