As The Market Collapses, Top Crypto Businesses Look For Acquisition Prospects

News | July 8, 2022 By:

Since the beginning of May 2022, the crypto market continues to crash. Because of that many crypto businesses that are operating in the marketplace see the losses. Nowadays some of the companies and startups in the crypto world try to attract more consumers in order to see some profits and avoid going bankrupt. Among the top companies that try to make their services more appealing to their clients are Ripple and FTX. 

Ripple and FTX, two of the most prominent cryptocurrency startups, have informed CNBC that they are actively seeking acquisitions to help the market develop. Because of that, it is most likely that they might see some benefits. Searching the acquisitions is a hint that certain cryptocurrency companies believe they’re big enough and well-capitalized to make deals.

 “We are in a really excellent position in terms of our capital and liquidity,” Brett Harrison, president of cryptocurrency exchange FTX U.S., said in an interview last week. “We are looking across the industry for prospective merger and acquisition options.”

The company representative states that his firm is going to find some businesses that are going to help them to attract new customers, which will result in gaining in income. It is worth noting that after purchasing Blockfolio in 2020, FTX was able to attract more customers. CNBC reported earlier in May that FTX is aiming to purchase brokerage start-ups in order to expand into stock trading.

FTX And Ripple VS Market Crash

As recently as last year, FTX U.S. purchased LedgerX, a futures exchange that already had a number of regulatory licenses in the United States. Buying firms like that as the company representatives say will help them to increase awareness and credibility of their companies among the crypto investors. The FTX CEO stated: “This is something we’re doing all across the world, including in countries like Japan, Australia, and Dubai, where Harrison says they’ve been able to work with local businesses or make acquisitions in order to get the licenses they want.”

In the meanwhile, Ripple CEO Brad Garlinghouse claimed the business had “a very robust financial sheet” and predicted a boom in crypto sector mergers and acquisitions. As he thinks the crypto market is going to rebound, which means that they should be ready for the market recovery in order to see more benefits from this rebounding. 

“Blockchain and crypto M&A, I believe, will see an increase. That hasn’t been shown to us yet. However, I believe such will be the case in the future.” Even though he is quite optimistic, some experts think that the crypto market isn’t going to recover quite soon and it may not be as appealing for investors as it was until the market crash. 

Garlinghouse told CNBC last week at the World Economic Forum in Davos, Switzerland, that “I absolutely believe if that evolves, we would explore things like that.” At this point of expansion, “I believe we’re more inclined to be the purchaser than the supplier,” he said. This approach in terms of the economy might be rational. This is because at the moment of the crash they might see more losses from selling dome services and goods rather than benefits. 

It is also worth highlighting that according to PWC, the worldwide value of mergers and acquisitions in crypto rose from $1.1 billion in 2020 to more than $55 billion in 2021. A surge in currency values in November of last year led to a record high for bitcoin. Prices, on the other hand, have dropped significantly since then. According to CoinDesk statistics, Bitcoin is now 55% lower than its all-time high of $68,990.90. Certain acquisitions may become more appealing to bigger players if bitcoin prices and company valuations fall.

What Does The Future Hold For Crypto Market?

Nowadays the most popular cryptocurrency Bitcoin is estimated at $29 890. This is one of the lowest prices of the mentioned currency for one year. Bitcoin had an almost similar price in 2021 July. Since then the cryptocurrency started to increase in value and finally in November 2021 BTC reached its peak price. After that, it started fluctuating, and then in May 2022, it saw a significant decrease in value. Because Bitcoin is the most traded currency in the crypto market, it has a crucial effect on other cryptos as well. So, when it comes to forecasting what will be in the future for the crypto market, we should look at the Bitcoin price. When we talk about the crypto market crash there should be mentioned what caused these significant drops in the marketplace. The main thing is that after the decrease of BTC investors started to panic which resulted in Luna losing its value. 

So, what does the future hold for the crypto market crash, and what will be the effect of this crash on crypto businesses? Nowadays experts have opposed projections. Some experts think that the crypto market is going to rebound. Because of its volatility and big liquidity, the crypto market can suddenly or gradually recover. As the past data shows, crypto has its ups and downs. At the moment the crypto market is in a situation where some investors think that it might collapse. However, based on data, crypto had more hard times which finally resulted in the market’s flourishing. 

Apart from these optimistic predictions, some experts think that this is the end of the crypto market and it’s not going to recover and rebound. It will gradually start to decrease in value, then it will have some stable situation and after that, it will finally collapse. 

In terms of crypto businesses. It should be stated that some businesses like FTX and Ripple, as already mentioned, are going to take advantage of this situation and prepare for the future market rebound in order to make more profits. However, whether or not these steps will be profitable for crypto companies, is all matter of the time.