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BitGo's Revenue Jumped 80%, But Its Margin Tells the Real Story
14 Aug 2026, 13:41
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BitGo posted its fastest revenue growth since going public, but the headline number is mostly a quirk of how spot crypto trades are booked, and the company's actual take from that business was a fraction of a percent.
BitGo reported total revenue of $4.33 billion for the second quarter, up 80% year over year, the fastest growth the crypto custody firm has posted since its public listing. But the number is misleading on its own: direct costs for the quarter came to roughly $4.29 billion, meaning BitGo actually kept about $43 million of that revenue. The gap isn't an accounting quirk unique to this quarter, it is simply how the company's core business works, and the quarter that produced the best-looking headline number happens to be the one where the underlying margin was thinnest.
Almost all of the reported revenue comes from BitGo buying and selling crypto as principal for clients, a business where spot trades are recorded at their full gross value on the revenue line, while derivatives are booked net, showing only BitGo's margin. In the second quarter, digital asset sales alone produced $4.2 billion in revenue against $4.19 billion in cost, a margin of just 17 basis points, down from 32 basis points in the first quarter and 19 basis points a year earlier. Outgoing CFO Ed Reginelli attributed the swing to a shift in mix: derivatives volume fell to roughly $1 billion from close to $3 billion, while spot trading grew, and because spot is booked gross while derivatives are booked net, that shift alone inflates reported revenue while shrinking margin.
Stripping out the pass-through trading revenue paints a different picture of where BitGo's money actually comes from. Of the $43 million it kept, subscriptions and custody services contributed about $28 million, or roughly two-thirds, growing a modest 8.5% year over year but carrying no direct cost. The $4.2 billion trading operation, by contrast, contributed only about $7 million. Staking revenue rose 31% sequentially to $65 million, but BitGo's take rate on those rewards fell to 6% from 16% in the prior quarter, which management attributed to a large institutional client staking Ether at a discounted rate, a sign of pricing pressure even as volume grows.
The quarter also brought governance concerns. BitGo posted a net loss of $19 million against net income of $38 million a year earlier, and management concluded that its disclosure controls were "not effective" as of quarter-end, citing unresolved weaknesses in IT access controls and accounting staffing that date back to before its IPO. Two days before the earnings release, CFO Ed Reginelli told the board he intends to resign effective September 15. BitGo shares, trading around $4.85 as the quarter closed, sit roughly 73% below the company's $18 January IPO price, suggesting investors are pricing the business on its actual $43 million in net revenue rather than the headline $4.3 billion figure.
Almost all of the reported revenue comes from BitGo buying and selling crypto as principal for clients, a business where spot trades are recorded at their full gross value on the revenue line, while derivatives are booked net, showing only BitGo's margin. In the second quarter, digital asset sales alone produced $4.2 billion in revenue against $4.19 billion in cost, a margin of just 17 basis points, down from 32 basis points in the first quarter and 19 basis points a year earlier. Outgoing CFO Ed Reginelli attributed the swing to a shift in mix: derivatives volume fell to roughly $1 billion from close to $3 billion, while spot trading grew, and because spot is booked gross while derivatives are booked net, that shift alone inflates reported revenue while shrinking margin.
Stripping out the pass-through trading revenue paints a different picture of where BitGo's money actually comes from. Of the $43 million it kept, subscriptions and custody services contributed about $28 million, or roughly two-thirds, growing a modest 8.5% year over year but carrying no direct cost. The $4.2 billion trading operation, by contrast, contributed only about $7 million. Staking revenue rose 31% sequentially to $65 million, but BitGo's take rate on those rewards fell to 6% from 16% in the prior quarter, which management attributed to a large institutional client staking Ether at a discounted rate, a sign of pricing pressure even as volume grows.
The quarter also brought governance concerns. BitGo posted a net loss of $19 million against net income of $38 million a year earlier, and management concluded that its disclosure controls were "not effective" as of quarter-end, citing unresolved weaknesses in IT access controls and accounting staffing that date back to before its IPO. Two days before the earnings release, CFO Ed Reginelli told the board he intends to resign effective September 15. BitGo shares, trading around $4.85 as the quarter closed, sit roughly 73% below the company's $18 January IPO price, suggesting investors are pricing the business on its actual $43 million in net revenue rather than the headline $4.3 billion figure.