The digital asset trust and security company, BitGo, is now attempting to widen its crypto offerings. Specifically, the Palo Alto company is now acquiring the institutional crypto firm Lumina in an attempt to bolster its standing.
BitGo acquires Lumina
Lumina is a service that institutional investors use to manage their cryptocurrency portfolios and track tax obligations. BitGo is not disclosing the exact sum it paid to acquire Lumina. However, Lumina did raise $4 million in a seed investment round during 2018.
BitGo’s acquisition of Lumina is clearly an attempt to broaden the Palo Alto company’s appeal. This will likely leverage Lumina’s existing appeal to various institutional clients and its expertise in crypto tax dealings.
According to a recent article by Fortune, BitGo will likely attempt to supercharge its reach through synergies from Lumina.
The Fortune piece states that BitGo will now be able to offer its clients, many of whom purchase crypto assets over several different exchanges, a comprehensive dashboard to manage their assets.
What’s more, Fortune speculates that this will allow the company to appeal to investors who are facing issues or uncertainty relating to crypto tax rules. The US IRS rules for cryptocurrency sales are notoriously murky, and Fortune suggests BitGo will now be able to give them direct support.
BitGo is on a spending spree
This is not the first major acquisition by BitGo, however. Last year the company bought Hedge, which is a firm that facilitates crypto “staking” lending. Moreover, just this March saw BitGo buy Harbor. Harbor, in turn, is a firm that aims to offer security tokens that have not yet found support on the market.
BitGo’s CEO, Mike Belshe, notes that all of these acquisitions are helping BitGo prepare to become a larger actor in the cryptocurrency space.
“All of this is about moving up financial services stack, and becoming a full-service provider,” Belshe said. What’s more, he also went on to note that BitGo is seeing a surge in its new insurance and lending businesses.
This is a trend that is sweeping the wider cryptocurrency industry. Increasing consolidation is seen with optimism by some, and as a cautious development by others. Although it could be a sign of growing maturity in the market, it also soaks up talent.
Critics of consolidation worry that bigger crypto firms may eschew some of the fundamental principles of democratic, free decentralization and become more like traditional corporations.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.