Recent developments around the crypto industry have continued to point to the fact that sometime in the not so distant future, crypto exchanges (the service providers powering the crypto industry) will be a really big business.
Yesterday, crypto exchange Bitstamp announced that it has been acquired by Belgian-based investment firm NXMH, with the deal fully paid in cash. The latest acquisition easily brings to mind a similar business deal which took place in September, when Rakuten Group bought over a local Bitcoin exchange – Everybody’s Bitcoin for $2.4 million.
In addition, you would only have to go back to a little over a year ago to read about how Korea’s largest crypto exchange Korbit, was sold to media giants NXC, which somehow is the parent company of NXMH.
So, why are crypto exchanges suddenly becoming hot property for companies who are operating in the mainstream of traditional finance markets?
The simple answer could be that these exchanges have a big potential to become really successful in the coming years. If this is not the reason, then why is NXMH paying an undisclosed fee in an all in cash deal for as much as 80% of Bitstamp, the world’s 27th largest cryptocurrency exchange?
Bitstamp CEO, Nejc Kodrič even confirmed in the Reuters report that the sale was unplanned since they didn’t have to go around looking for buyers. In his words, he told the publication,
The sale wasn’t planned. There was no active effort to go around and solicit buyers. The vibrant industry last year sparked potential interest from buyers to make a footprint in the industry. We started to get approached by buyers in the middle of last year.
The deal has been wrapped up, though, with the CEO retaining 10% of his growing crypto exchange while investor Pantera Capital opted to sell part of its ownership stakes in Bitstamp to the new owners.
What Now For Bitstamp After Buyout?
As pointed out by Kodric, NXMH acquisition of Bitstamp will not in any way change how the crypto exchange operates. Instead, it will allow the exchange its rise to the top of the crypto exchange ranks while also operating independently from Korbit.
At the time of writing, Bitstamp was the 27th largest crypto exchange by trade volume with over 3 million registered users since it started operation in 2011. The firm has also remained profitable in 2018 despite the crypto prices tumble, a result which CEO Kodric attributed to the fact that market prices are still well above what it was in early 2017.
Obviously, the deal is a win-win for NXMH and then Bitstamp since it will let the exchange enjoy a new influx of capital and give the new owners a chance to leave its footmark in a fast-evolving industry.