Crypto custodian BitGo has presented its financial results for the third quarter of 2026, demonstrating a paradoxical picture: the company's revenue declined by 50.9% — to $2.85 billion, while net profit grew by 94.4%, reaching $44.1 million.
Such a sharp drop in revenue is explained by two key factors. First, trading activity in the market noticeably decreased, which directly hit the platform's commission income. Second, the share of low-margin stablecoin operations in the business structure grew — a segment that generates significant turnover but does not provide comparable profitability.
The source of profit is revaluation, not operations
The growth in net profit is predominantly accounting in nature. The key driver was an unrealized gain of $71.5 million from the revaluation of crypto assets on the company's balance sheet. Without this component, the final result would have been negative.
It is telling that BitGo recorded an operating loss of $19.2 million. This signals that the custodian's core business operated at a loss during the reporting period, and the positive bottom line was ensured exclusively by the growth in the value of digital assets on its own balance sheet.
This structure of the report exposes the company's fundamental dependence of its financial result on market conditions. When the market grows, the revaluation of crypto reserves masks the weakness of the operating model; when the trend reverses, this effect will work in the opposite direction.
Particular attention should be paid to the shift toward stablecoin operations. This segment provides volumes but compresses margins, which poses to management the question of the balance between scale and profitability amid declining trading activity.
Cryptalist analysis: The BitGo case illustrates a trap typical of the crypto industry — the dependence of reported profit on the volatility of balance-sheet assets amid a weakening operating core. Institutional investors should evaluate such results with an adjustment for unrealized gains, since the sustainability of a custodian's business model is determined by commission flows, not by the revaluation of reserves. The persistence of an operating loss against the backdrop of a growing share of low-margin stablecoin operations points to structural pressure that could fully manifest when the market cycle changes.