Mizuho projects Clarity Act delay to extend BitGo edge each quarter; target cut to $11
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Mizuho analysts project that the delay in U.S. crypto market-structure legislation will extend BitGo Holding's regulatory edge each quarter, according to a research note published Thursday. They cut their BitGo price target to $11 from $14 and maintained an Outperform rating. BitGo this week reported second-quarter revenue of $4.33 billion, up 79.6% year over year, even as it posted a $19 million net loss.
The Mizuho Call
Mizuho cut its BitGo price target to $11 from $14 in a research note published Thursday, while maintaining an Outperform rating. Analysts said the market reads the delay in U.S. market-structure legislation as an overhang, but they believe it may quietly help BitGo. BitGo shares traded at $5.61 as of 2:47 p.m. EST, according to The Block's price data. Mizuho disclosed it managed or co-managed a BitGo public offering and received investment-banking fees in the past 12 months.
BitGo Q2 Results
BitGo reported $4.33 billion in total second-quarter revenue, up 79.6% year over year. The company posted a net loss of $19 million, narrower than the $60.7 million loss in the previous fiscal quarter. Subscription and services revenue rose 7% quarter over quarter, and the customer base grew 27% year over year. Mizuho described BitGo as a high-growth/recurring revenue business despite the loss.
Regulatory Head Start
The Clarity Act is intended to establish a federal market-structure framework for digital assets and clarify authority between regulators, but it has faced repeated delays. Mizuho argues that each quarter the U.S. framework remains unsettled extends BitGo's charter and compliance advantage. The company operates the first federally chartered digital asset trust bank owned by a publicly traded company, so its regulatory standing does not depend on the Clarity Act passing. Analysts cited BitGo's work with DTCC, Canton and Figure as evidence it could become important infrastructure for tokenized securities and onchain financial products.
What's Next
Mizuho expects BitGo's charter and compliance headstart to compound with each quarter the Clarity Act remains unsettled, but no floor vote has been scheduled. It remains unclear whether Congress will pass the framework before new entrants clear the rising bar or BitGo's head start erodes.
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Mizuho projects Clarity Act delay to extend BitGo edge each quarter; target cut to $11
