By the Numbers: Crypto Winter Mergers and Acquisitions
Crypto mergers and acquisitions have increased significantly in the last 2 years, and exchanges have led the charge in this regard. These crypto exchanges have taken to buying out their competitors in an effort to not only expand their business, but to stay one step ahead of their competition. This has led to a buying spree in the market which has not abated despite the bear market.
Crypto exchange takes the lead
Naturally, in the crypto market, buying activity would be expected to slow down as the price of various digital assets begins to decline. However, this has not been the case with the bear market of 2022. Instead of retreating and taking a breather, crypto exchanges have taken to this market as an opportunity to buy up companies at a discount.
The hunt for the most attractive and lucrative acquisitions has seen the top crypto exchanges make a number of acquisitions. Coinbase has led the charge with 8 acquisitions already recorded in the last two years alone, while FTX has made six acquisitions.
Most of these acquisitions have been in an effort to expand into other markets during this time. As for FTX, it is the purchase of Japanese exchange Liquid, which is the largest in the country by trading volume. For Coinbase, the purchase had been the purchase of Turkey’s largest exchange BTC Turk. At the same time, Gemini had acquired BITRIA, a full-service digital asset custody service.
Exchanges top mergers & acquisitions list | Source: Arcane Research
Why the acquisitions?
One thing that crypto exchanges always have is plenty of cash. This is because their business model is one that generates a lot of money on a daily basis, enabling these exchanges to quickly process an acquisition when an opportunity arises.
This is seen in FTX’s recent acquisitions and reported interests in buying up crypto companies. Recently, the crypto exchange was approved to buy the assets of bankrupt lender Voyager Digital for $1.4 billion. It doesn’t stop here, as the company is said to be looking at the assets of another bankrupt lender, Celsius Network. Celsius had announced the deadline for bids, and FTX is also expected to submit an offer. As well as having the option to buy another crypto lender, BlockFi.
Total market cap remains below $1 trillion | Source: Crypto Total Market Cap on TradingView.com
Crypto exchanges also get a 360 view of the market, allowing them to decide which acquisitions are the best investments at a time. Thus, they are able to easily find these opportunities and their ever-present cash flow allows them to make mouth-watering deals on these companies.
In addition to Coinbase’s 8 acquisitions and FTX’s six acquisitions in the last two years, Gemini, Yearn and Graph Blockchain have each had 5 acquisitions in the same time period.
Featured image from Blockchain News, charts from Arcane Research and TradingView.com
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