Exclusive: BitGo says institutional conversations are shifting to tokenization

Investing.com -- BitGo's institutional client conversations have shifted toward tokenization in recent months, with the custodian's technology supporting a large portion of the transactions in a July 15 live production run, Adam Sporn, head of prime brokerage and institutional sales at the company, told Investing.com.

Sporn's comments came ahead of BTGO's second-quarter results on Wednesday. Shares are up around 5.2% on Thursday following the release.

"While institutional demand over the last few years has been focused around digital asset custody, trading, staking, financing, and settlement, a lot of our institutional discussions over the last few months have been focused on tokenization," Sporn said.

"We saw a big step forward in adoption with the July 15th DTC Tokenization live production trades where BitGo technology supported a large portion of the tokenized transactions."

The company’s quarterly earnings release pointed to the same event, noting that BitGo provided the regulated custody infrastructure behind DTCC's post-quarter demonstration of tokenized securities, alongside work supporting Canton Network and Figure.

Sporn's comments followed BitGo's integration of institutional trading venue Spotex into its Go Network, which lets eligible clients trade on the venue's ECN while assets remain in regulated custody, with BitGo handling clearing and settlement with liquidity providers after execution.

"Keeping assets in custody through the trade lifecycle is central to that evolution," Sporn said. "Where the market structure supports it, separating custody from execution can reduce unnecessary asset movement and pre-funding, reduce venue counterparty exposure, simplify reconciliation, and improve capital efficiency."

Eligible workflows are said to allow clients to reach execution venues while assets stay at BitGo Bank & Trust, National Association, the firm's OCC-regulated national trust bank.

On demand drivers, Sporn pointed to balance-sheet mechanics rather than directional exposure, highlighting hedging, treasury management, access to derivatives and financing, collateral deployment and operating across 24/7 markets.

Institutions are also said to be weighing security, liquidity, execution quality, counterparty risk, reporting and operational resilience alongside regulatory oversight, he said.

"The objective is not a closed ecosystem," Sporn added. "It is to give institutions greater execution choice through a consistent custody, collateral, clearing, and settlement framework."

BitGo’s client numbers rose 26.2% year-over-year to 5,833, while normalized assets on platform climbed 31.4% to $65.2 billion.

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