Bitgo changes course, acquires HeightZero instead of Prime Trust
BitGo, a wallet infrastructure provider and digital asset custodian, has purchased HeightZero, a provider of software tools tailored for wealth managers interested in diversifying their portfolios with crypto and digital assets. The exact monetary details of the transaction remain undisclosed.
HeightZero offers a platform designed for financial advisors, enabling them to integrate crypto investments into their services seamlessly. The platform simplifies the process, allowing advisors to provide clients access to a diversified range of assets, including cryptocurrencies, which might otherwise be intricate and time-consuming to manage.
The deals comes shortly after BitGo terminated its preliminary agreement to acquire rival cryptocurrency infrastructure provider Prime Trust.
Mike Belshe, BitGo’s CEO, highlighted the importance of wealth managers and RIAs being alert and responsive to market shifts, especially in the context of potential approval of a spot bitcoin ETF. Given the inherent complexities associated with cryptocurrency trading, particularly its speculative and intricate nature, many institutional entities and early crypto ventures are shifting their focus towards providing long-term holdings designed for mainstream wealth managers and regulated investment advisors (RIAs).
“Today the HeightZero platform is universally rated as the best solution for wealth managers and SLAs working in the digital asset market. We’ve been proud to have partnered with HeightZero over the past several years and to be a part of their incredible growth. This acquisition is a doubling down in the space for BitGo, HeightZero, and our clients. We look forward to maintaining HeightZero’s leadership position, while increasing the safety, security, and features provided in the joint products,” said Mike Belshe, CEO of BitGo.
As of today, 90% of financial advisors are regularly fielding inquiries from their clients regarding digital assets. However, only a modest 15% of these advisors are actively allocating cryptocurrencies in their clients’ investment portfolios, as per the results of a recent survey conducted by VettaFi and Bitwise.
The survey revealed that a multitude of factors hinder financial advisors from increasing crypto allocations in their clients’ portfolios. Some of the primary concerns cited include the potential failures of centralized institutions, challenges related to cryptocurrency custody, and a perceived lack of diverse investment options in the digital asset space. These barriers contribute to the hesitance among financial advisors to expand their crypto offerings despite the growing interest from clients.
HeightZero’s platform handles essential tasks for crypto clients, such as portfolio rebalancing, statement generation, tax loss harvesting, and automated billing. Prior to the acquisition, HeightZero was already utilizing BitGo’s custody services.
BitGo, having recently secured a funding boost of $100 million, appears to be proactively seeking acquisition opportunities to expand its footprint in the rapidly evolving crypto domain. The Series C financing round came a few months after Galaxy Digital called off its proposed $1.2 billion acquisition.
The fresh capital infusion boosts the Palo Alto, California-based company’s valuation to $1.75 billion. BitGo did not disclose who exactly joined in on this funding round. All they’re saying is that it’s some fresh faces – “new, outside strategic investors.”
Mike Belshe, the CEO of BitGo, told Bloomberg that the new funds that are specifically set aside for some big plans including strategic acquisitions and to grow the business with secure and regulated custody, wallet, and infrastructure solutions.
