Wall Street Eyes BitGo Despite 40% Stock Plunge

BitGo's stock has crashed 40% since IPO, but analysts see it as prime M&A bait for traditional finance firms entering crypto infrastructure.

When a stock crashes 40% and Wall Street analysts still scream "buy," something interesting is happening. That stock is BitGo, and the story isn't about its recent IPO stumble—it's about what traditional finance sees in crypto infrastructure.

BitGo went public in January at $18 per share. Today it trades near $10.26. Yet analysts at Compass Point and Canaccord Genuity aren't just defending the stock—they're calling it an acquisition target.

The M&A Magnet Theory

Compass Point's Ed Engel puts it bluntly: BitGo is "an ideal M&A target for Wall Street companies expanding into crypto." The logic is straightforward. Instead of building crypto infrastructure from scratch, traditional firms could simply buy BitGo's full suite of services.

But here's what makes this interesting: analysts aren't just betting on BitGo's core custody business. They're betting on its potential to become a full-service prime broker—like Galaxy Digital or Coinbase.

The numbers tell the story. Galaxy's average revenue per trading counterparty is roughly 6x BitGo's. If BitGo can close that gap, the upside is massive.

The $1.2 Billion Precedent

This isn't BitGo's first M&A rodeo. In May 2021, Galaxy Digital agreed to buy the company for $1.2 billion, only to walk away when BitGo allegedly failed to provide timely financial statements.

Fast-forward to today: BitGo's market cap sits at about $1.24 billion—eerily close to that abandoned deal price. The difference? BitGo is now a public company with transparent financials.

Reading the Tea Leaves

Of the 10 analysts covering BitGo, nine rate it a buy. Their price targets range from $12 to $18, implying 17% to 75% upside from current levels.

Yet the broader crypto market tells a different story. Bitcoin has dropped 24% year-to-date, Coinbase has tumbled 30%, and the sector faces continued headwinds.

Canaccord sees BitGo's underperformance as market overreaction, arguing the selloff exceeds what "any shorter term P&L trajectory weakness might warrant."

The Infrastructure Play

What's driving Wall Street's confidence isn't just BitGo's current business—it's the infrastructure thesis. As more traditional financial firms push into digital assets, they need the pipes and plumbing that companies like BitGo provide.

The question isn't whether traditional finance will embrace crypto infrastructure. It's whether they'll build or buy.