Cryptocurrency

By The Numbers: Crypto Winter Mergers And Acquisitions

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Crypto mergers and acquisitions are up significantly in the last 2 years, and the exchanges have been leading the charge in this regard. These crypto exchanges have taken to buying out the competition in a bid to not only expand their operations but to stay one step ahead of their competitors. This has led to a buying spree in the market that has not slowed despite the bear market.

Crypto Exchanges Take The Lead

Naturally, in the crypto market, it would be expected that buying activity would slow down as the price of various digital assets starts to decline. However, this has not been the case with the bear market of 2022. Instead of backing off and taking a breather, crypto exchanges have taken to this market as an opportunity to acquire 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 done six acquisitions.

Most of these acquisitions have been in a bid to expand into other markets during this time. In the case of FTX, it is the purchase of Japanese exchange Liquid, which is the largest in the country by trading volume. For Coinbase, it had purchased 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 an ample supply of cash. This is because their business model is one that generates a lot of cash on a daily basis, leaving these exchanges in a position to be able to quickly process an acquisition when an opportunity comes up.

This is seen in FTX’s latest acquisitions and reported interests in buying up crypto companies. Recently, the crypto exchange was approved to purchase the assets of bankrupt lender Voyager Digital for $1.4 billion. It doesn’t stop here, as the company is said to be eyeing the assets of another bankrupt lender, Celsius Network. Celsius had announced the deadline date for bids, and FTX is also expected to put in an offer. As well as having the option to purchase another crypto lender, BlockFi.

Crypto total market cap chart from TradingView.com

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 determine 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 over the last two years, Gemini, Yearn, and Graph Blockchain have had 5 acquisitions each in the same time period.

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

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