Top Crypto Firms Go in Search of Acquisition Targets as Market Crashes

Ripple and FTX, two major cryptocurrency companies, told CNBC that they are looking for acquisitions as the industry hopes to drive growth by buying other companies.

This is a sign that some crypto companies believe they are big and well capitalized enough to spend money on acquisitions.

Brett Harrison, president of cryptocurrency exchange FTX US, said in an interview last week that the company is “in a very good capital and liquidity position” and “will be looking to the market for potential opportunities. of mergers and acquisitions”.

Harrison said FTX US will look for companies that help them acquire more users or regulatory licenses. In 2020, FTX acquired the Blockfolio trading platform, which helped it attract more users. Earlier this month, CNBC reported that FTX was looking for brokerage start-ups to acquire to push stock trading further.

Last year, FTX US purchased LedgerX, a futures exchange that had several licenses from regulators in the United States.

“We do it globally, in places like Japan, Australia, in Dubai, different places where we’ve been able to either partner with local companies or sometimes do acquisitions so we can get the licenses that we we need,” Harrison said. .

Meanwhile, Brad Garlinghouse, CEO of cross-border payments company Ripple, said the company has “a very strong balance sheet”, predicting an increase in mergers and acquisitions in the crypto industry.

“I think there will be a slight increase in mergers and acquisitions in the blockchain and crypto space. We haven’t seen that yet. But I think it’s probably in the future. And I certainly think that as that unfolds, we would consider things like that,” Garlinghouse told CNBC in an interview last week at the World Economic Forum in Davos, Switzerland.

“We are now at a stage of growth where I think we are more likely to be the buyer than the … seller,” he added.

Crypto mergers and acquisitions skyrocketed in 2021, with the aggregate value of such deals totaling more than $55 billion, up from $1.1 billion in 2020, according to PWC. This coincided with a cryptocurrency price boom that took bitcoin to an all-time high in November last year.

But since then, prices have collapsed. Bitcoin is around 55% off its all-time high of $68,990.90, according to data from CoinDesk.

A drop in cryptocurrency prices, and potentially in valuations of companies in the sector, could make some acquisitions attractive to big players.

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