BitGo CEO’s Public Leap: Blockchain to Revolutionize the Flawed IPO Process

BitGo’s Journey to the Public Markets

Mike Belshe, the founder and CEO of BitGo, has been in the crypto world since its early days. He started BitGo in 2013 as a simple Bitcoin custody service. Fast forward to today, and BitGo has grown into a major player offering full crypto services for big institutions. This year, Belshe took a huge step: he made BitGo a public company through an IPO.

But during this process, Belshe saw big problems with how IPOs work. The whole system feels old and stuck in the past. He believes blockchain technology can fix these issues and make going public faster, fairer, and open to more people.

What is an IPO and Why Does It Need Fixing?

An Initial Public Offering, or IPO, is when a private company sells shares to the public for the first time. This lets the company raise money and gives investors a chance to own a piece of it.

Right now, IPOs follow a set path run by big Wall Street banks. They line up rich investors to buy shares at a fixed price before trading starts. The goal is a quick price jump, called a ‘pop,’ when everyday investors can buy in. This sounds good, but Belshe says it’s not the best way to find the true price of the shares.

• Inefficient price discovery: The price is set too early, based on a small group of insiders.
• Middlemen control: Banks take big fees and decide who gets in first.
• Limited access: Small investors miss the early deals.

Belshe points out better ways, like Dutch auctions or direct listings. In a Dutch auction, everyone bids, and the price finds its level naturally. Google used this in 2004. Direct listings let shares trade right away without setting a price upfront, like Spotify did in 2018. Yet, Wall Street often pushes back on these because they cut into bank profits.

How Blockchain Mirrors IPOs – And Can Improve Them

Belshe compares IPOs to launching a new crypto token. Both start as ‘thin markets’ – low trading volume, high volatility, and uncertain prices. When a blockchain project issues tokens, they hit exchanges and find their value through open trading.

“The IPO process is actually pretty similarly unwieldy. It’s the same basic thing. You’re taking a token, or in this case, an equity, and you’re making it available on markets, and it starts out as a thin market.”

Blockchain can change this. Imagine issuing shares as digital tokens on a blockchain. Benefits include:

1. No middlemen: Companies connect directly with global investors.
2. Better price discovery: Real-time bidding like in crypto markets.
3. 24/7 trading: No waiting for market hours.
4. Lower costs: Smart contracts automate paperwork and compliance.
5. More inclusion: Anyone with a wallet can join, not just elites.

This could break the grip of big banks. New platforms might pop up, making public offerings more innovative and competitive.

BitGo’s Evolution: From Bitcoin Custodian to Institutional Giant

BitGo started simple: safely storing Bitcoin for users. Over 10+ years, it expanded to custody for all major cryptos, trading, lending, and more. Today, it serves banks, hedge funds, and corporations entering crypto.

Belshe sees BitGo becoming like old-school finance leaders – think JP Morgan or State Street, but for digital assets. These firms have lasted centuries handling custody and clearing. BitGo aims to do the same for blockchain.

Going public helps. It brings in capital for growth and proves crypto infrastructure is ready for mainstream finance.

Crypto’s Rough Patch: Belshe’s Take

Belshe has lived through multiple crypto booms and busts. On the current downturn, he stays calm. High interest rates, scandals like FTX, and macro fears have hit prices hard. But he sees it as a healthy shakeout.

Key causes:

• Over-leverage in the system.
• Regulatory uncertainty.
• Shift to real-world use cases over hype.

Still, adoption grows. Institutions keep building on blockchain. BitGo’s IPO shows confidence in long-term potential.

The Future: Blockchain-Powered Public Markets

Belshe hopes regulators and Wall Street embrace blockchain. Projects like tokenized stocks on platforms such as tZERO or Securitize are early tests. Full integration could mean:

• Instant settlements vs. T+2 days.
• Fractional shares for small investors.
• Programmable equity with built-in rules.

Challenges remain: laws must adapt, security is key, and trust builds slowly. But with leaders like Belshe pushing, change feels near.

Why This Matters for Crypto Investors

BitGo’s public move signals maturity. More crypto firms will follow, blending tradfi and defi. Watch for blockchain IPO tools – they could unlock trillions in value.

Stay tuned to crypto news. The blockchain IPO revolution might start with custodians like BitGo and spread everywhere.

Ready to dive deeper? Explore how tokenization is reshaping finance.

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