By The Numbers: Crypto Winter Mergers And Acquisitions

Crypto mergers and acquisitions have increased dramatically over the past 2 years, and exchanges have led the charge in this regard. These crypto exchanges have started to buy out the competition in an effort not only to expand their operations but also to stay ahead of their competitors. This led to a buying frenzy in the market which did not slow down despite the bear market.

Crypto exchanges take the lead

Naturally, in the crypto market, one would expect buying activity to slow down as the price of various digital assets begin to decline. However, that has not been the case with the 2022 bear market. Instead of pulling back and blowing a bit, crypto exchanges have turned to this market as an opportunity to acquire companies at a discount.

The hunt for the most attractive and lucrative acquisitions has seen major 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 completed six acquisitions.

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Most of these acquisitions were aimed at expanding into other markets during this period. In the case of FTX, it is the purchase of the Japanese exchange Liquid, which is the largest in the country by trading volume. For Coinbase, it was 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 Acquisitions?

One thing that crypto exchanges always have is an ample supply of cash. Indeed, their business model generates a lot of cash on a daily basis, which allows these exchanges to be able to quickly process an acquisition when an opportunity arises.

This can be seen in the latest FTX acquisitions and reported interest in buying crypto companies. Recently, the crypto exchange was approved to buy the assets of bankrupt lender Voyager Digital for $1.4 billion. It doesn’t end there, as the company is reportedly monitoring the assets of another bankrupt lender, Celsius Network. Celsius had announced the deadline for bids, and FTX is also expected to bid. In addition to having the option of buying another crypto lender, BlockFi.

Total Crypto Market Cap Chart from TradingView.com

Total market cap remains below $1 trillion | Source: Crypto Total Market Cap on TradingView.com

Crypto exchanges also have a 360° view of the market, allowing them to determine which acquisitions are the best investments at a time. Thus, they are able to easily find these opportunities and their ubiquitous cash allows them to make tempting deals on these companies.

In addition to Coinbase’s 8 acquisitions and FTX’s six acquisitions over the past two years, Gemini, Yearn, and Graph Blockchain have completed 5 acquisitions each over the same period.

Featured image from Blockchain News, charts from Arcane Research and TradingView.com

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By The Numbers: Crypto Winter Mergers And Acquisitions


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