PayPal TAKING OVER CRYPTO: BitGO ACQUISITION UNDER NEGOTIATIONS. Beating Institutions WITH SENTIMENT
PayPal changed his mind about buying crypto custodian BitGo
PayPal refused to buy custodian BitGo
The reason for the failure of the deal is not named
The head of BitGo admitted that so far the company does not reach payback
American payment giant PayPal refused to buy one of the largest cryptocurrency custodians BitGo
The largest e-payment provider PayPal will not buy BitGo’s crypto custodian. This is reported by Fortune, citing sources close to the deal.
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The reason for the failure is not named, but in an interview with Fortune, BitGo CEO Mike Belsh said that so far the custodian is not making a profit, as it is in “growth mode”.
Belsh also added that BitGo has no plans to raise capital in the near future..
The possible purchase amount of BitGo remained unknown, however, according to the PitchBook service, BitGo raised $ 58.5 million in 2018 with an estimate of $ 170 million.
BitGo’s custodian is among the many companies that have benefited from the current bullish Bitcoin rally, says BitGo CEO.
However, Belsh acknowledges that the cryptocurrency industry has faced regulatory challenges as giants like PayPal and Square enter the market. On moment of writing BitGo holds $ 16 billion worth of cryptocurrencies, making the custodian one of the largest in the market.
The first news about a possible takeover of BitGo appeared at the end of October. Then it was reported that PayPal is studying the possibility of acquiring BitGo as part of a course to expand support for cryptocurrencies.
PayPal itself declined to comment on rumors of a deal breakup.
In addition to being one of the largest custodians, BitGo is also the largest custodian of the Wrapped Bitcoin (WBTC) bitcoins tokenized on the Ethereum blockchain. For 2020, the custodian reported on the balance of 78 thousand WBTC (~ $ 1.8 billion at the current exchange rate).
At the same time, in August alone, Alameda Research generated 14 654 WBTC, which at that time was almost 70% of the issued bitcoins in the Ethereum network in a month.
BitGo Custodian was founded in California in 2013. The company is focused on providing services for the storage of cryptocurrencies in digital wallets with multi-signatures, as well as offline storage.
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