October 31, 2018 marks the 10-year anniversary since the emergence of blockchain technology, spearheaded by Bitcoin. The industry has overcome several hurdles to get to where it is today.
There’s still a lot of negative sentiment delaying the adoption of blockchain and cryptocurrencies by the general public.
However, there are also key changes being made to strengthen the industry. On one hand, partnerships are fostering cooperation between blockchain projects and entities outside the blockchain world. On the other hand, acquisitions of blockchain companies and entities are being made by bigger organizations, both within and outside of the blockchain world.
The following is a list of major acquisitions that have rocked the crypto industry thus far in 2018. These acquisitions highlight the maturity of the industry, and the list is in no particular order.
Top Crypto Acquisitions in 2018
Bitstamp Acquired by NXMH
Bitstamp is a Luxembourg-based crypto exchange. It was founded in Slovenia by Nejc Kodric (CEO) and Damijan Merlak, and boasts about $30 million in daily trade volume. On October 29, 2018, the exchange was acquired by the Belgium-based investment firm NXMH, for an amount rumored to be in the range of $400 million.
The CEO of Bitstamp expressed that the crypto industry is at a point where consolidations within the industry make sense. He also mentioned that the quality of the buyer and their offer prompted his decision. He went on to say that Bitstamp will remain Bitstamp and there will be no change as to how they operate because of the acquisition.
NXMH is a subsidiary of NXC Corp, which bought a large stake in the South Korean exchange Korbit last year. NXMH now has an 80% stake in Bitstamp with CEO Kodric still having a 10% stake. The deal is said to have been an all-cash deal.
Trust Wallet Acquired by Binance
Binance has been busy in 2018, making significant strides in the crypto industry. A notable move by the crypto exchange has been its acquisition of Trust Wallet on July 31. The details of the deal are undisclosed.
Trust Wallet is an open-source, decentralized, and secure mobile wallet that supports Ethereum and Ethereum-based tokens (ERC-20, ERC-223, and ERC-721).
The CEO of Binance, Changpeng “CZ” Zhao, expressed that the acquisition is complementary to the service rendered by Binance. With Trust Wallet, Binance now has a product for users who want to withdraw funds to a wallet rather than let their money remain on the exchange. The app will function independently, but there will be cooperation in certain areas like marketing.
BitTorrent Acquired by Tron
Tron had its mainnet launch on May 31, 2018, and migrated from the Ethereum blockchain. Since then it has been undergoing developments to lure developers and users to its platform. On July 24, the founder of Tron, Justin Sun, confirmed the acquisition of the file-sharing company, BitTorrent.
Tron is rumored to have paid about $126 million to own the company. Tron plans to fully integrate BitTorrent and Tron and merge the teams working on both into one. Currently, BitTorrent operates from the Tron office in San Francisco.
BitTorrent claims to have over 100 million active users globally. It is expected that Tron takes advantage of this to further boost the relevance of their platform, which currently has a market cap of $1.4 billion.
Paradex Acquired by Coinbase
Paradex is a decentralized cryptocurrency exchange built on the 0x protocol. It allows users to trade tokens directly from their wallet without account sign-ups or trading fees.
On May 23, 2018, Coinbase announced the acquisition of Paradex as part of Coinbase’s commitment to investing in decentralized infrastructure. The financial details of the deal were not disclosed.
Chain Acquired by Stellar
Chain is a blockchain startup, founded in 2014, that builds cryptographic ledger systems to make financial services smarter and more secure. They have notable customers such as Visa, Nasdaq, and Citigroup.
The for-profit entity of the Stellar network known as Lightyear purchased Chain in an all-cash deal for an undisclosed amount. This purchase led to the creation of Interstellar. Interstellar is now led by (former) Chain CEO Adam Ludwin and Stellar protocol creator Jed McCaleb as CEO and CTO respectively.
The announcement of this acquisition was made on September 10, 2018, and there have been developments on the new venture since its creation.
Bithumb Acquired by BK Global
The popular South Korean crypto exchange, Bithumb, was sold to the Singapore-based BK Global Consortium on October 11, 2018. The amount of the sale was reported to be about $353 million.
The contract agreed for BK Global to purchase 50% plus 1 shares from BTC Korea Holdings, the largest shareholder of Bithumb with 75.99% shares. This deal definitely gives BK Global the controlling influence over the crypto exchange. BK Global Consortium is led by a renowned plastic surgeon, Dr. Kim Byung-gun.
The acquisition is expected to be completed in February 2019. After the acquisition, Bithumb is expected to be jointly managed by their current management and BK Global.
Poloniex Acquired by Circle
Circle is a company that facilitates cryptocurrency investment, trade, and payment. The company is notably backed by investment from Goldman Sachs.
On February 26, 2018, Circle announced the acquisition of the crypto-trading platform, Poloniex. Circle reportedly paid $400 million for the acquisition. Currently, Poloniex records a daily volume of about $10 million.
Telescope Acquired by Bitmain
Bitmain Technologies, arguably the largest crypto-mining rig manufacturer, acquired an open-source, browser-based Bitcoin Cash (BCH) crypto wallet known as Telescope. Telescope was founded in 2018 and optimized for Google Chrome and Mozilla Firefox, through which users can send and receive BCH transactions.
This acquisition by Bitmain is in preparation for listing on the Hong Kong Stock Exchange, which the company is seriously working towards.
Pantronics Holdings Acquired by Huobi
Pantronics Holdings is an investment-holding company that manufactures and distributes power-related, and electrical and electronic products. Pantronics Holdings is a public limited company based in Hong Kong.
Huobi, a cryptocurrency exchange platform headquartered in Singapore, purchased about 199 million (73.73%) of Pantronics’ shares. The total amount was about $70 million. The deal was reported to have taken place on August 27, 2018.
This acquisition allows Huobi to be able to go public (if the company desires) via a reverse IPO or a reverse takeover (i.e. of a public company by a private company). However, Huobi CEO Leon Li has dispelled impending thoughts of Huobi going public.
Earn.com Acquired by Coinbase
Earn.com is an online platform that allows users to be paid in cryptocurrency for replying to emails, taking surveys, and completing tasks. Earn.com makes it possible for people to earn cryptocurrency in their spare time and hence adds transactional value to the crypto world.
Earn.com announced its acquisition by Coinbase on April 16, 2018. The deal is reported to be worth about $120 million. The co-founder and CEO of Earn.com Balaji Srinivasan became the CTO of Coinbase through the acquisition.
Conclusion
The crypto industry is maturing, and as such many acquisitions have taken place and many more are yet to come. In many cases, the purpose behind acquisitions of the sort we have looked at here is consolidation, to make the company or project be fundamentally stronger.
Acquisitions in the crypto industry may not directly affect crypto coins and tokens, but they often affect the volume of transactions on blockchain platforms. This, in turn, could then indirectly affect prices of cryptocurrencies.
As the crypto market hopes for an upturn in the coming year, these acquisitions give the crypto industry a firmer footing for a longer and stronger run when the bulls kick in.
Is there any notable acquisition in 2018 not on this list? Let us know in the comments!
