The Malta-based crypto exchange Binance has recently announced acquisition over the CoinMarketCap; the most accurate, real-time crypto data website. The move was preceded by several acquisitions around the globe. Does this mean that the company seeks to control the crypto market?
9 Crypto acquisitions for Binance in one year
Binance CEO Changpeng Zhao earlier said the platform plans to carry out two major acquisitions in 2020. The CoinMarketCap deal may be one of the two acquisitions, given that it is one of the largest crypto exchanges.
In addition, Binance plans to list 180 cryptocurrencies by the end of 2020.
5 factors make CoinMarketCap deal profitable
Zhao said Binance has acquired CoinMarketCap for its leading position in the market. To ease the concerns raised by some people, the CEO indicated that CoinMarketCap will continue working independently even if the initial indicators do not support the idea.
What are the real incentives behind this major deal?
CoinMarketCap managed to attract 207.2 million visitors during the last six months, according to the data published by LikeWeb.
Meanwhile, Binance lured nearly 113.8 million visitors during the same period; a rise of more than 80 percent compared with Binance.
Moreover, a total of 5,290 coins are being traded on CoinMarketCap platform which has ranked 570th over the last 90 days. Meanwhile, the competitors Binance and Coinbase ranked 1,688 and 1,562, respectively.
CoinMarketCap’s market cap reached nearly $650 million in the summer of 2019, while the acquisition is valued at $400 million. Accordingly, the deal is profitable for Binance.
The number of staff at CoinMarketCap amounts to 40, and they can be added to Binance’s 930 employees.
Size of both platforms
Binance took the leadership among crypto exchanges, dominating nearly 21.7 percent of the total number of traders, according to the Block website. It was followed by Coinbase (20.3 percent). BitMax ranked third with 11.8 percent.
This was not the first acquisition made by Binance as it concluded other nine ones in 2019. In addition, the company may carry out other deals this year when the world overcomes coronavirus which is stumbling block in the way.
According to Binance official website, the company announced that it has completed the acquisition of Trust Wallet, a secure and intuitive mobile wallet, in July 2018.
Trust Wallet, rebranded later to Binance Trust Wallet, is a secure, open source, decentralized and anonymous Ethereum wallet application that supports Ethereum and over 20,000 different Ethereum based tokens. Binance also added Wixlar coin by the end of July 2018.
Then, at the end of 2018, the wallet announced support of bitcoin custody using IOS system, and then updated it on Android system.
In September 2019 Binance acquired the JEX digital asset trading platform and was incorporated under the name Binance JEX. On the new platform, derivatives, including futures and options, and other derivatives are traded.
Binance announced in November 2019 its intention to acquire the WazirX, most prominent and reliable bitcoin trading platform in India, by subscribing to the currency that is traded under the WRX symbol, and finalized the acquisition on February 3, 2020.
In December 2019, Binance acquired DappReview, a platform that specializes in providing data-driven research and advertising services for decentralized applications Dapps, which relies mainly on the blockchain network.
Binance investments around the world
Binance platform has invested in several financial platforms and companies with the aim of supporting digital currencies, including its mid-2019 announcement of its intention to expand in the US market, as it was looking to launch a new platform in cooperation with BAM.
Last August, it announced its intention to enter a partnership with governments and companies to develop new digital currencies to compete with Facebook’s Libera Coin Project, where it plans to launch a regional version of Libera.
In December 2019, it announced investing an unspecified sum by buying shares in the FTX derivative trading platform.
On March 31, Binance announced its intention to launch a new cryptocurrencies trading platform in South Korea called Binance KR. The new stock exchange will be supported by Binance KRW (BKRW).
The latest announcement of the Binance platform was its reliance on Binance Card as an alternative to the credit card for the Visa-supported network. Binance Card will be supported by more than 46 million merchants in 200 countries in the world.
Why is the acquisition of CoinMarketCap a major deal?
Looking at the acquisitions made during 2018 and 2019, we find that the ConMarketCap deal is significant when compared to others. Generally speaking, according to The Block and TokenData Twitter handle, the biggest deals made over the past two years were Circle’s acquisition of Poloniex for $ 400 million.
It was followed by the acquisition of Bitstamp by the Belgium-based investment firm NXMH for about $ 400 million as well.
Coinbase then acquired Earn.com for $ 120 million, and Kraken acquisition over Crypto Facilities for $ 100 million in 2019.
Consequently, the acquisition of CoinMarketCap is among the major deals.
However, with the foregoing advantages, the deal is profitable, and at the same time it reinforces the idea of seeking to monopolize the digital currency market.