BitGo’s Institutional OTC Platform Just Added Derivatives Trading—Here’s Why It Matters

BitGo just threw a heavyweight punch into the crypto institutional ring. Its over-the-counter (OTC) desk, a quiet giant for big-money trades, now lets clients trade derivatives. No more hopping between platforms for hedge funds and family offices—spot and futures under one roof.

The Institutional Play

This isn't about retail traders. BitGo's move targets the deep-pocketed players who move markets. By bundling OTC spot trading with derivatives, they're offering a one-stop shop for complex strategies—hedging, leverage, arbitrage—without the settlement risk that plagues fragmented systems. It's a direct challenge to standalone derivatives exchanges.

Settlement, Not Just Speculation

The real magic might be in the back office. BitGo's model leans on its qualified custodian status. Trades can potentially settle directly into cold storage, slashing counterparty risk. For institutions paranoid about security (and they all should be), that's a bigger draw than any leveraged position.

A Cynical Take on Finance

Let's be real—the traditional finance crowd spent years calling crypto derivatives 'dangerous speculation.' Now, as they quietly build their own exposure, a regulated custodian is building the tools for them. The hypocrisy is almost as predictable as a quarterly earnings miss.

The bottom line? Crypto's infrastructure is maturing faster than critics admit. BitGo isn't just adding a feature; it's building the plumbing for the next wave of institutional capital. Whether that capital brings stability or just new forms of volatility remains the billion-dollar question.

Separating Trading and Custody for Institutions

Under the expanded offering, institutions can access OTC derivatives trading while maintaining asset segregation through BitGo’s regulated custody framework.

The structure is designed to address long-standing concerns around counterparty risk and operational controls, particularly for hedge funds, treasury managers, lenders and proprietary trading firms.

The derivatives functionality is integrated with BitGo’s existing prime services, which include electronic trading, collateral management and settlement. By embedding derivatives within the same infrastructure, BitGo aims to enable capital efficiency without compromising on security or compliance standards.

Leadership Hire to Drive Derivatives Growth

Alongside the platform expansion, BitGo appointed Tim Kan as Director of Derivatives Trading. Kan joins from QCP Capital, where he served as Head of Sales Trading, bringing experience in structuring and executing institutional derivatives strategies.

Kan will lead BitGo’s OTC derivatives team and oversee the continued build-out of the platform. “As institutional participation in digital asset markets continues to evolve, demand for derivatives strategies that can be executed in conjunction with separately regulated custody solutions is increasing,” he said, adding that the focus will be on delivering customized strategies at scale while maintaining disciplined risk controls.

Building on OTC Desk Momentum

BitGo’s OTC trading desk launched in February 2025 and has since built a growing base of institutional clients. Initially focused on spot trading and financing solutions the desk has positioned itself as a regulated execution venue paired with secure settlement and custody.

The addition of derivatives extends that proposition allowing clients to pursue yield generation, hedging and directional exposure through bilateral trades with BitGo’s OTC desk.

The platform supports a broad range of digital assets and collateral types, enabling tailored strategies for different institutional profiles, including miners and digital asset treasury companies.

Institutional Infrastructure as Markets Mature

BitGo co-founder and CEO Mike Belshe said the expansion reflects a long-term commitment to institutional-grade infrastructure.

“Clients are increasingly seeking the ability to execute more sophisticated strategies without compromising on custody, risk management, or operational controls,” he said, pointing to the need for scalable systems as market participation deepens.

The move also underscores BitGo’s broader ambition to operate as a full-service institutional trading and infrastructure provider, combining liquidity access, derivatives expertise and regulated custody in a single platform.

IPO Ambitions

The platform expansion comes as BitGo prepares for a potential U.S. initial public offering. The firm has indicated it is targeting a valuation of up to $1.96 billion, seeking to raise as much as $201 million by offering 11.8 million shares priced between $15 and $17 each.

BitGo Holdings announces launch of initial public offering.https://t.co/f1vM5vl1II

As investor appetite for crypto infrastructure firms grows, BitGo’s push into derivatives highlights its strategy to capture institutional demand across the digital asset lifecycle.