Why Did BitGo’s Revenue Fall So Sharply?
Digital asset sales account for the vast majority of BitGo’s reported revenue and fell 52% year over year to $2.72 billion. The company attributed the decline to softer crypto trading activity and a higher proportion of stablecoin transactions, which generate lower margins.The segment produced just $4.2 million of contribution margin after associated costs, equivalent to 15 basis points. That was down from 20 basis points a year earlier and 17 basis points in the second quarter.The gap between BitGo’s headline revenue and revenue after direct costs is important for assessing the underlying business. Most of the billions recorded as digital asset sales revenue are offset by the cost of the assets sold, leaving a much smaller amount available to cover operating expenses.Adjusted EBITDA was a $4.3 million loss, compared with a $13.5 million profit a year earlier. Operating expenses excluding direct costs declined 5.5% sequentially to $56.6 million as cost reductions introduced during the second quarter took effect.
Investor Takeaway
How Much of BitGo’s Profit Came From Its Bitcoin Treasury?
BitGo recorded a $71.5 million unrealized gain on digital assets during the quarter, compared with $19.1 million a year earlier. That gain more than offset the company’s operating loss and was the main reason net income reached $44.1 million.The company held 2,399 bitcoin on its corporate balance sheet at September 30, valued at $200.4 million. It also reported $143.2 million in cash and cash equivalents and said it had no corporate-level debt apart from borrowings used to finance lending activities.The treasury effect means quarterly earnings can move substantially with crypto prices even when operating trends move in the opposite direction. For the first nine months of 2026, BitGo remained in a $35.6 million net loss despite its profitable third quarter.BitGo also repurchased $24.7 million of common stock during the quarter under a $50 million authorization.
Investor Takeaway
Are BitGo’s Institutional Businesses Still Growing?
Operational metrics were stronger than the revenue decline suggests. BitGo’s number of clients increased 33.1% year over year to 6,640, while normalized assets on the platform rose 31.9% to $59.9 billion. Normalized staked assets increased 41.1% to $10.5 billion.Reported assets on the platform fell 42.4% to $59.9 billion because lower crypto prices reduced their dollar value. BitGo said assets would have been $83 billion using September 30 prices rather than the median-price methodology used for the reported metric.The company also completed its acquisition of NYDIG’s institutional trading operation during the quarter. BitGo has since combined the acquired derivatives, financing and structured-product capabilities into BitGo Global Markets, extending the business beyond custody and spot trading.Its settlement network is expanding at the same time. BitGo recently extended its off-exchange settlement connection with OKX internationally, allowing eligible institutions to access exchange liquidity while keeping supported assets with BitGo rather than pre-funding the trading venue.
Can New Products Reduce BitGo’s Dependence on Trading Activity?
Stablecoin-as-a-Service revenue provided one area of year-over-year growth, rising 52.5% to $37.4 million. However, $34.5 million of sponsor fees left a 7.7% take rate, illustrating again that gross revenue does not translate directly into margin.BitGo is also expanding into tokenized traditional assets. The company has said it wants to use digital asset and stablecoin networks to broaden access to U.S. equities and support on-chain settlement, collateral and financing.That strategy is already extending beyond equities. BitGo recently added WisdomTree’s tokenized Treasury money market fund to BitGo Mint, creating another route for institutional clients to manage traditional financial assets within its custody and settlement environment.