BitGo Shares Drop 12% Below IPO Price on Second Trading Day, Signaling Early Post-IPO Volatility
BitGo, a leading institutional crypto custody firm, saw its shares tumble about 12% on the second day of public trading, falling below the $18 IPO reference price after an initial debut high near $24. The decline continues a weak debut and reflects early post-IPO volatility as investors reassess valuation amid a muted crypto market and cautious tech IPO sentiment in early 2025. Drivers cited include profit-taking, investor selling pressure, concerns about growth prospects, regulatory uncertainty for crypto firms, and broader macroeconomic headwinds such as interest-rate expectations. BitGo’s revenue depends on institutional adoption, transaction volumes and custody fees, and it competes with Coinbase Custody, Anchorage and Fidelity Digital Assets. Traders should watch BitGo’s upcoming quarterly results, client growth announcements and any regulatory updates for signs of institutional demand and sector sentiment. Short-term implications include heightened volatility for crypto-adjacent equities and potential knock-on effects for desks and tokens that rely on custody services; recovery prospects hinge on earnings, major client wins and clearer regulatory signals.
Bearish
The second-day 12% share drop and fall below the IPO price signal negative near-term sentiment for BitGo specifically and for crypto-adjacent equities more broadly. For traders, this is likely to translate into short-term selling pressure on BitGo stock and heightened volatility for related custody and crypto infrastructure names. The immediate bearish impact stems from profit-taking after the debut spike, valuation repricing, and persistent concerns about regulatory risk and weak institutional demand in a muted crypto market. Over the medium to long term the outlook is conditional: a clear improvement in institutional adoption, strong quarterly results, or decisive regulatory clarity could reverse sentiment. However, absent positive catalysts, the stock and sector could remain under pressure as investors weigh growth prospects against macro and regulatory headwinds.