By the Numbers: Crypto Winter M&A

By the Numbers: Crypto Winter M&A

Crypto M&A has increased dramatically in the past 2 years and exchanges have led the way. These crypto exchanges have started buying up the competition in an attempt to not only expand their operations but also stay ahead of their competitors. This led to a buying frenzy in the market that did not slow down despite the bear market.

Crypto exchanges are taking the lead

Naturally, in the crypto market, buying activity can be expected to slow down as the price of various digital assets begins to decline. However, this was not the case with the bear market of 2022. Instead of pulling back and puffing up a bit, crypto exchanges turned to this market as an opportunity to acquire companies at a discount.

The hunt for the most attractive and profitable acquisitions has led major crypto exchanges to make a number of acquisitions. Coinbase leads 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 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 a sufficient amount of money. In fact, their business model generates a lot of money 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 FTX’s recent acquisitions and reported interest in buying crypto companies. The crypto exchange was recently 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 announced the deadline for bids and FTX is also expected to bid. In addition to being able to buy another crypto lender, BlockFi.

Total Crypto Market Cap Chart by 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 any given time. Thus, they are able to easily find these opportunities and their ubiquitous money allows them to make attractive deals with these companies.

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

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

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