BitGo Stock Falls 57% After IPO: Why Crypto Infrastructure Isn’t Immune to Market Cycles 

• BitGo stock fell over 57% from its $18 IPO price after weak FY2025 results.
• Staking revenue plunged 64% in Q4 2025, exposing infrastructure’s market dependence.
• A shareholder lawsuit claims BitGo overstated its resilience to crypto market cycles.

BitGo, a major institutional crypto custody and security provider, is facing a proposed class action lawsuit after a sharp decline in its stock price following its initial public offering (IPO). The case has renewed broader questions about whether crypto infrastructure companies are truly insulated from market cycles or remain dependent on crypto prices and activity levels. 

What the BitGo Lawsuit Alleges

The lawsuit, announced in July 2026 by law firm Levi & Korsinsky, alleges that investors who purchased BitGo Holdings Inc. (BTGO) shares during the relevant period may have suffered losses due to alleged misleading statements or omissions. The allegations have not been proven, and BitGo will have the opportunity to respond. 

The lawsuit argues that BitGo downplayed the risks of its business model. While the company warned that revenue depended on volatile crypto prices, executives said the business remained “strong and resilient,” which investors say gave a misleading picture.

The filing points to sharp swings: platform assets rose from $17B to $104B before falling to $81.6B, staking revenue declined, and BitGo posted a $14.8M loss instead of an expected profit. Investors can seek lead plaintiff status by August 7, 2026.

Are Crypto Custody Companies Protected from Crypto Market Cycles?

BitGo raised $212.8 million in a US IPO in January 2026.  Its IPO was widely read as a sign that institutional crypto infrastructure had matured to Wall Street standards.

Custody providers are often considered part of the foundational infrastructure of the digital asset industry and viewed as more stable than exchanges or token speculation.

However, custody revenue is still tied to assets under management, staking activity, and trading volumes — all of which contract when digital asset prices and activity fall. 

BitGo’s swing from asset growth to asset decline, and the sharp drop in staking income, suggests infrastructure providers remain exposed to the same cyclicality as the rest of the market, just through different revenue levers.

On the Flipside

• The class action lawsuit against BitGo contains allegations that have not been proven in court.
• A single company’s stock performance does not necessarily represent the entire crypto infrastructure sector.

Why This Matters

BitGo’s post-IPO performance is becoming a test case for how investors price crypto infrastructure companies. If custody and staking revenue prove as cyclical as trading revenue, markets may need to reassess valuations across the entire sector.

Dive into DailyCoin’s popular crypto scoops right now:
BNB Chain Plans New Layer-1 Blockchain for AI Finance
SHIB Burns Sizzle 682% As Charts Flash Conflicting Signals