Crypto custody and wallet company BitGo is emerging as a major acquisition target for traditional financial firms, CoinDesk reported on Feb. 17.

It said Wall Street analysts forecast BitGo not only secures long-term growth momentum by expanding into crypto financial services, but is also likely to attract interest from traditional financial firms.

CoinDesk said Wall Street experts see BitGo as a strategic asset that can speed traditional financial firms' entry into the digital asset market by expanding crypto infrastructure.

BitGo listed earlier this year as a company providing digital asset custody and security services, with institutional investors as its main customers. It was valued at $2 billion at its IPO, but its market capitalisation has shrunk to about $1.24 billion due to a recent share price decline.

In the past, Galaxy Digital tried to acquire BitGo for $1.2 billion, but the deal fell through due to financial statement issues. But some analysis now says barriers to an acquisition have fallen because BitGo is listed. Canaccord Genuity said, "BitGo will be an attractive asset for traditional financial firms seeking rapid market entry," and set a $15 price target.

BitGo shares are down 40 percent since the IPO and are trading at about $10.26.