BitGo's chief executive wants prime brokerage to produce 100% of the custodian's revenue

Belshe has said he wants prime brokerage to account for "100% of our revenue" ^[1], and he set out the plan in an interview in Singapore on October 6 ^[2]. Read literally, that target leaves custody with no revenue of its own. Client assets stay in qualified custody so that funds can trade, borrow and settle against them without withdrawing anything ^[3]. BitGo calls the result a "virtuous cycle" in which custody feeds trading and lending ^[4]. The revenue would come through BitGo Prime, the brokerage arm, and through the Go Network, which handles trading, financing and settlement ^[5].

The interview account does not include BitGo's current split between custody fees and prime revenue, so the distance to 100% cannot be measured from outside. The one activity figure on offer is the Crossover clearing total. Each basis point of fee charged on it comes to $200,000 ^[16]. When BitGo listed on January 22 under the ticker BTGO, the market valued it above $2 billion, and the offering raised about $213 million ^[15].

Large banks sell hedge funds custody, lending, execution and settlement as one bundle, and BitGo is copying that model with its trust bank charter as the regulated base ^[12]. The charter sits in BitGo Bank & Trust, a federally chartered digital asset trust bank ^[10]. Both counterparties named so far are partners: OKX supplies exchange liquidity and Crossover Markets handles clearing ^[9][8]. On this evidence BitGo is competing for the financing and settlement business while its clients trade on venues it does not own ^[9].

If the plan works, prime revenue grows until custody fees are a small remainder, and BitGo runs a crypto prime brokerage on a bank charter. In a middle outcome, custody stays the larger and steadier line and 100% stays a target. The bad outcome is a sharp drawdown that hits the financing book before it has scale. I think the middle outcome is the likeliest over the next year. The only published activity figure is small next to a company valued in the billions ^[16][15]. The case against that view is that BitGo already has the kind of custody base bank prime desks grew from, with more than 1,550 supported assets and $250 million of insurance ^[11]. A fund that never has to move its collateral has less reason to borrow somewhere else ^[3].

The view is wrong if BitGo's first disclosure that splits out the two lines shows prime revenue already ahead of custody fees ^[1].