Is the Frenzied Acquisition of Crypto Companies by Giants Good or Bad?

The current wave of acquisitions is a transition ceremony for the crypto industry from its wild west days to a compliant infrastructure, brutal yet real.

Written by: Blockchain Knight

Bear markets are often a golden period for giants to quietly make big moves. In the past month, we have seen at least five typical acquisition cases in the crypto industry.

From Samsung Securities acquiring a 2% stake in Upbit operator Dunamu; Robinhood acquiring WonderFi for $180 million to enter the Canadian crypto market; Figure spending $717 million to acquire Kiavi to enter on-chain real estate credit; asset management giant Franklin acquiring 250Digital to establish Franklin Crypto; and of course, the fire sale of Messari.

The most lamentable case is Blockworks acquiring Messari. Messari was valued at $300 million at the end of the 2022 bull market, but is now being sold for just over $10 million, a discount of over 90%.

Once high-valued crypto startups are facing immense survival and cash flow pressures, while cash-flow-stable media and data giants like Blockworks can swallow competitors at a very low cost, completing resource integration.

Faced with increasingly stringent global regulations, giants are no longer choosing to barge in but are rapidly expanding by acquiring locally regulated licensed institutions.

For example, WonderFi owns two seasoned compliant platforms in Canada, and Robinhood essentially bought a ticket to enter the Canadian market along with 300,000 ready-made users.

Similarly, Upbit is the best-compliant exchange in South Korea, with traditional brokerage giants directly taking stakes, laying the groundwork for the future integration of traditional finance and crypto assets.

Figure's acquisition is the largest transaction recently, signaling that RWA has evolved from a storytelling phase to truly on-chain traditional assets worth billions.

Kiavi can bring in over $7 billion in transaction volume annually, and Figure is directly integrating its residential loans into the on-chain capital market, meaning that the value of blockchain technology as the next-generation financial settlement infrastructure has been recognized.

Franklin Crypto's target clients are clearly aimed at pension and sovereign wealth funds. These institutions manage trillions of dollars in funds, which in the past could not touch crypto assets due to compliance and risk control, but now Wall Street is directly customizing active management strategies for them.

For giants like Samsung, Robinhood, and Franklin Templeton, who have strong strategic resolve, bear markets are not scary; instead, they are the best time to enter the market.

In a bull market, any mediocre project can shout out a valuation of hundreds of millions of dollars, and giants just step in to take over. In a bear market, the market bubble is squeezed out, and you can buy the technology architecture and compliance teams that took years to build for just 1/10 of the original price.

Moreover, the bull market is filled with speculation, while retail investors exit in a bear market, allowing giants to use this gap to test various infrastructures.

Financial giants typically look at macro cycles of 3-5 years. As the global crypto tax framework and compliance legislation are implemented, the crypto industry is moving from the wild west to institutionalization.

Once the global macroeconomic cycle changes and liquidity improves in the future, they will be able to reap most of the dividends, leaving latecomers far behind.

The current wave of acquisitions is a transition ceremony for the crypto industry from its wild west days to a compliant infrastructure, brutal yet real.