Why Crypto Acquisitions Will be the Norm After the Binance-Coinmarketcap Deal


In brief:

  • Mid last week, Binance confirmed rumors that it had acquired the popular crypto tracking platform of Coinmarketcap.com. 
  • The acquisition elicited mixed reactions from crypto enthusiasts. Some approved the deal while others saw it as a possible hostile takeover compromising Coinmarketcap.
  • However, with this major move, Binance has now normalized the process of acquisitions in the crypto-verse. 

Over the years, acquisitions in the crypto-verse have become more common as larger crypto projects seek to enhance their market share as well as increase the types of products and services they offer to the crypto community. The most notable ones have been orchestrated by the CEO of Tron, Justin Sun. In the last few years, the Tron foundation has acquired BitTorrent, DLive, StemmIt, and the Poloniex exchange. In the case of Binance, the crypto exchange has added Coinmarketcap to a long list of acquisitions on its business portfolio. Others include JEX, Trust Wallet, Wazir X and Dapp Review.

Mixed Reactions on the Coinmarketcap Acquisition

As is the norm when one company buys another, concerned investors/customers usually have mixed reactions towards the event. In the case of Coinmarketcap, some users felt the move was beneficial for the entire crypto ecosystem. They postulate that with Binance now funding the platform, the team at Coinmarketcap will concentrate on their vision of providing reliable crypto market data to the crypto community.

However, there are those who feel that Binance’s acquisition is a move to centralize information and thus influencing the crypto ecosystem in their favor. Some feel that there is a high probability of Binance ‘bending’ data to their advantage. This fear has been highlighted via the following tweet.

Why Crypto Acquisitions Will be the Norm After the Binance-Coinmarketcap Deal 18

More Binance Acquisitions in the Pipeline

In January’s New Year message to the Binance community, CZ had hinted that more acquisitions were in the pipeline. In the detailed message, he explained:

As the saying goes, when you can’t beat them, buy them. And this is definitely true for all of our acquisitions. When we identify top talent with a top product that we can’t beat, and the teams share common values, a merger makes sense in most cases.

Binance made no less than 9 full acquisitions in 2019, with only a small number of them being publicly announced so far. There are always a number of deals being discussed at any given time…

Crypto Acquisitions Will Become the Norm

With the proverbial honeymoon period of crypto investing having ended with the 2017 crypto bull-run, many projects launched during that period and soon after, have either thrown in the towel as their finances dwindle, or have already closed shop. Those which have not, are probably hanging by a thread due to the tough economic times over the years. The crypto markets have experienced a massive reduction in market cap from record highs at above $800 Billion in January 2018, to current levels around $190 Billion. Such a contraction is bound to have adverse effects on the majority of crypto projects.

As with all business environments, there are projects that have managed to continue thriving despite the grim prospects of the future. Consequently, such projects will slowly but surely start the process of absorbing their competition or projects that will enhance their operations.

Coronavirus Effect on Crypto Projects

We can also predict that crypto acquisitions will become the norm in the coming months due to another reason: the global economic effects of the Coronavirus. Larger crypto projects will seek out struggling ones and give them an offer they cannot refuse.

(Feature image courtesy of Max Leveridge on Unsplash.)

Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.



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