Galaxy Digital to acquire crypto firm BitGo in a $1 billion deal.

According to the Wall Street Journal report, Bitcoin-focused firm Galaxy Digital Holdings Ltd. has agreed to buy BitGo for $1.2 billion in cash and stock, the first multi-billion dollar deal in the cryptocurrency industry. The deal also coincides with a surge in interest and a nearly yearlong rally in the crypto sector, whose market value has surged to $2 trillion in recent months.

Galaxy Digital will have more than $40 billion in assets under custody.

According to the report, the acquisition of BitGo will make Galaxy Digital a crypto-focused financial-services firm with more than $40 billion in assets under custody. The combined crypto-based company will offer an array of products and services, including trading, custody and asset management, investment banking, prime lending, tax services, and even a mining operation, aimed mainly at institutional investors. Galaxy founder and Chief Executive Michael Novogratz said, “In order for crypto to become this revolutionary transformation, youre going to need bigger companies that are going to knock heads against the bigger businesses” of traditional finance.

The deal will mark the largest acquisition to date in the crypto sector.

According to Dealogic, excluding companies going public through special-purpose acquisition companies, or SPACs, the deal will mark the largest acquisition to date in the crypto sector, according to Dealogic. The BitGo acquisition is aimed at making Galaxy Digital a major player in the competition to attract institutional and individual investors, the CEO noted. Galaxy Digital is paying $265 million in cash and issuing 33.8 million new shares. The deal has been approved by the boards of both companies and is expected to close in the fourth quarter. BitGo shareholders will own about 10% of the new company.