PayPal Will not Acquire Crypto firm BitGo
According to multiple sources, online payments giant PayPal and crypto custodian, BitGo have broken down after the two sides apparently failed to agree on a valuation. A person close to the payment giant confirmed the BitGo talks had fallen through, adding that PayPal is exploring other potential acquisitions.
In a recent interview, BitGo CEO Mike Belshe refused to confirm PayPal rumors. But he said that BitGo has been "in talks with everyone" over the years and that the privately held company won't accept a "small exit."
In addition, he also noted that his company now holds over $16 billion worth of cryptocurrency assets for its customers and that it's acquiring several significant clients every week.
Founded in 2013, BitGo it has a lower profile than firms like Coinbase and Kraken, which offer exchanges for anyone to buy and sell Bitcoin and other cryptocurrencies. BitGo's core offering is instead a custody service that securely stores crypto on behalf of institutions and other wealthy clients.
In the past year, BitGo has aggressively sought to redefine itself as a full-service crypto shop that offers other tax and lending services, as well as a means for clients to discreetly arrange large trades.
Belshe notes BitGo is among many companies that has benefited from the current Bitcoin bull market. But he says the crypto industry faces challenges in building infrastructure—including security—as large companies like PayPal and Square move into the field.
Belshe adds that the biggest crypto custodians, which also include Fidelity and Coinbase, will play a key role in working to ensure crypto continues to gain a foothold in mainstream finance.
According to Belshe, BitGo is not currently profitable, as it is in "growth mode," but that it has a "very healthy balance sheet" and has no plans to raise capital in the near future.
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