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A quick look at Crypto M&A; Friday metrics watch


Satoshi&Co Daily Crypto Newsletter

December 20 · Issue #254 · View online

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M&A activity in the crypto sphere over the past few years has been predominantly limited to the infrastructure sub-sector with exchanges and miners being the most active buyers. As the crypto industry matures, more crypto firms are looking to expand their business operations and product offerings through the M&A route.
With access to capital now becoming harder than it was a couple of years ago, companies generating strong cash flows with their core competencies in a particular business are looking to tap into new business opportunities such as custody by snapping up capital-starved smaller entities with a high potential for growth. Like with traditional M&A, acquisitions can also be driven by the need to address a growing market opportunity fast through bolt-on acquisitions that fit in fairly seamlessly.
Case in point is Kraken’s acquisition of derivatives platform Cryptofacilities; Although Cryptofacilities had low single digit volumes at the time of the acquisition, it had the requisite regulatory clearances from the UK FCA that was attractive to Kraken, as well as functioning derivative platform, which would be bolted on and revamped as Kraken Futures. Volumes have steadily grown here in line with the overall rapid mushrooming of the crypto derivatives market.
Crypto trading firm Circle went on an acquisition spree in Q3’17 by acquiring crypto exchange Poloniex for $400 million and crowd funding platform SeedInvest for an undisclosed price. Two years on, the company has announced a series of divestitures over the past few months with Poloniex spun out as an independent entity and Circle’s trading desk acquired by Kraken. 
Also, it is worth mentioning Facebook’s acquisition of UK startup Chainspace, to support its Libra efforts. 
As we move in to 2020 expect more consolidation in the more mature crypto businesses such as exchanges; there will also be opportunistic acquisitions of regional players by the US and Chinese majors. Custody is another fast-changing sector, as is security analysis on the blockchain with majors like Chainalysis and Elliptic looking to bolt on specific sets of capabilities or talented teams.
Source: PwC
Source: PwC
Source: Statista
Source: Statista
On to our Friday metrics…
Ethereum Locked in DeFi
MakerDAO still accounts for a lion’s share of ETH locked up in collateral, with more than 1.79 million of ETH locked up. Augur declined w/w by 2%. Maker showed a strong w/w growth of 7%.
Lightning Network Growth:
Capacity per channel was flat w/w. The total number of nodes increased by 1%, and the total number of channels was flat w/w.
(For reference, some previous articles on LN, here).
DEX Tracker:
Trading volumes on DEXs have increased on a w/w basis, with the average daily trading volume averaging 35k ETH for this week. IDEX remains the biggest DEX in terms of trading volume and DAI is the highest traded cryptocurrency on DEXs.
(For reference, some previous articles on DEXs, here and here).
Crypto Loans Tracker:
Compound Loans:
Total loans issued on Compound for the last week stands at approx. $3.5 million for the week, a steep decrease from $5.2 million in the previous week. WETH is the most borrowed cryptocurrency on Compound followed by DAI and BAT.
dYdX Loans:
Total loans issued on dYdX for the last week stands at approx. $9.4M for the week, a 70% increase from $14M last week. DAI is the most borrowed cryptocurrency on Compound followed by WETH and USDC.
MakerDAO Loans:
DAI loans issued on MakerDAO for this week stand at ~$14.1M, a 50% decrease from $4.2M last week. The total outstanding DAI debt currently stands at ~$86 million.
(For reference, some previous articles on MakerDao, here and here).
You can also check out last week’s Metrics Watch here.
Meanwhile in Crypto Wonderland....
“Cardano To Partner With New Balance”
Proving the origin and authenticity of retail products has often been proposed as one of the key use cases of blockchain, but it was largely the turf of companies like VeChain and recently, IBM. Cardano is now jumping into this field with both feet through a collaboration with New Balance, the athletic wear and sneaker brand. Together they’ve developed New Balance Realchain, a new initiative that uses Cardano’s blockchain to confirm the authenticity of a select model of shoes. Complete with a landing page and app, Realchain uses a physical card with an internal chip that can be scanned with a phone, confirming that the New Balance footwear is indeed genuine.
“Tether Considering An Algorithmic Stablecoin”
Stablecoin provider Tether is considering creating an algorithmic alternative to its popular USDT token – possibly allowing traders to use cryptocurrency as collateral – as a means to provide another route to issue and trade USD-pegged assets. Paolo Ardoino, CTO of Tether and affiliated exchange Bitfinex, told Crypto Briefing the company was researching a new algorithmic stablecoin, possibly to be known as the ‘USDTX’. Although details are scarce, ‘USDTX’ could enable traders access to a store of value through leveraging their cryptocurrency holdings, if Tether goes ahead with the project.
“Nasdaq Lists AI-powered Crypto Index”
The world’s second-largest stock exchange, Nasdaq, has listed the AI-powered CIX100 index created by crypto data provider Cryptoindex. The news was revealed in a press release shared with Cointelegraph on Oct. 15. CIX100 is a crypto market benchmark that analyzes uses a neural network algorithm to analyze data for the top 100 cryptocurrencies, taking into account over 200 factors. Reportedly designed to exclude coins with fake volumes and rankings, the “human-free” tool targets both industry newcomers and professional investors. According to the press release, the data is derived from the nine largest cryptocurrency exchanges globally and factors in the results of millions of trades alongside news releases and social media data.
“eToro Launches A Crypto Portfolio Based On Social Sentiment”
eToro, the popular cryptocurrency trading website, is partnering with The TIE, a cryptocurrency information services firm, to implement a Twitter sentiments trading portfolio, which lists Dash as its largest position. The announcement discusses how the TIE-LongOnly CopyPortfolio leverages social Twitter sentiment, both positive and negative, as a significant indicator to compensate for the fact that most cryptocurrency fundamentals are still maturing and thus do not have revenue, dividends or debt.
Crypto Twitter Pick
Joey Krug
To give you an idea for just how early crypto is, Solidity just now has try/catch statements! Slowly but steadily progressing!
What We Are Reading / Listening To
Binance is blitzscaling by Multicoin Capital
Bitwise’s Latest Plans to Get a Bitcoin ETF Approved featuring Hunter Horsley and Matt Hougan
Overnight Performance of Top 10 Currencies
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