BitGo swung to a $19 million net loss in the second quarter. Revenue climbed roughly 80% year-on-year to $4.3 billion. The results, reported August 12, lay bare the gap between top-line crypto growth and bottom-line profit at one of the sector’s largest custodians.
The loss marks a sharp reversal. BitGo posted $38.3 million in net income in the same quarter a year earlier, according to The Block. The Q2 loss did narrow from the $60.7 million recorded in the first quarter. Revenue rose 14.7% sequentially.
Most of the year-on-year deterioration came from the balance sheet. Not the income statement.
BitGo booked an $18.8 million unrealized loss on digital assets in Q2. A year earlier, the same line item showed a $55.8 million unrealized gain, Cointelegraph reported. That swing — more than $74 million between the two quarters — accounts for nearly all of the gap between profit and loss.
Weaker trading margins did the rest.
CEO Mike Belshe said on the earnings call that “profitability was impacted by lower margins and an unfavorable revenue mix.” He attributed the margin compression to “lower spreads on certain spot transactions” and a smaller contribution from derivatives. Neither source quantified the spread decline.
The numbers frame an awkward quarter for a publicly listed custody firm riding what both outlets describe as rising institutional demand. BitGo trades under ticker BTGO. It has benefited from broader inflows into regulated crypto custody. Top-line growth of 80% says the business is winning mandates. A $19 million loss says the business is not yet converting that into earnings.
BitGo is leaning on cost cuts to close the gap. The company reduced its workforce by roughly 15% in June. It expects expenses to decline in the third quarter as a result. Management guided to about $15 million in annualized cash savings from the measures. The board also authorized a share repurchase program of up to $50 million.
Belshe framed Q2 as a transition quarter following the June workforce reduction, per The Block. He told analysts that while the firm delivered revenue growth, the profitability miss reflected a mix shift toward lower-margin business lines. That’s a common pattern in crypto custody when spot volumes outpace derivatives and structured products.
Shares gave back ground after the print. BTGO fell 1.8% in overnight trading to $4.90. It had closed the session up 0.6% at $4.99, according to Yahoo Finance figures cited by Cointelegraph.
What the results do not show: how much of the $18.8 million unrealized loss is mark-to-market noise versus a structural drag. Neither source breaks out the loss beyond the headline figure. Neither specifies which digital assets drove it. For a custodian that holds client balances alongside proprietary positions, that distinction matters. The market will look for it in the full filing.
In the meantime, BitGo is a company growing revenue at 80% and still losing money. For now, it is asking investors to read that as temporary.
