Cryptocurrency majors Ripple and FTX told CNBC that they are looking at acquisitions as the industry hopes to drive growth by buying other companies.
It is a sign that some crypto companies feel they are big enough and well capitalized to distribute cash to acquisitions.
Brett Harrison, president of cryptocurrency exchange FTX US, said in an interview last week that the company is “very well positioned in terms of our capital and money” and will be looking into the market for potential M&A opportunities.
Harrison said FTX US will be looking for companies that will help it get more users or regulatory licenses. In 2020, FTX acquired the Blockfolio trading platform which helped it attract more users. earlier this month, CNBC reported FTX is looking for emerging brokerage firms to acquire to push further into stock trading.
Last year, FTX US bought LedgerX, a futures exchange with several licenses from US regulators.
“We do it globally, in places like Japan, Australia, Dubai, various places where we’ve either been able to partner with local companies or sometimes make acquisitions to be able to get the licenses that we need,” Harrison said.
Meanwhile, Brad Garlinghouse, CEO of cross-border payments company Ripple, said the company has a “very strong balance sheet” and predicted a spike in mergers and acquisitions in the crypto industry.
“I think there will be a slight increase in blockchain and crypto mergers and acquisitions. We haven’t seen that yet. But I think that’s a potential in the future. And I definitely think as that develops, we’ll look at things like that,” Garlinghouse told CNBC. In an interview last week at the World Economic Forum in Davos, Switzerland.
“We are now in a growth phase where I think we are more likely to be the buyer versus the … seller,” he added.
Crypto M&A activity boomed in 2021 as the total global value of these transactions reached more than $55 billion, compared to $1.1 billion in 2020, According to PWC. This coincided with a boom in cryptocurrency prices that sent Bitcoin to an all-time high in November of last year.
But since then, prices have collapsed. Bitcoin It is about 55% from a record high of $68,990.90, according to CoinDesk data.
The drop in cryptocurrency prices, and possibly the potential valuations of companies in the industry, could make some acquisitions attractive to big players.
