Binance To Acquire CoinMarketCap For $400 Million — Report

Binance To Acquire CoinMarketCap For $400 Million — Report

Binance to acquire CoinMarketCap is today’s biggest crypto news item. The exchange is said to be in the final stages of a rumored $400 million acquisition of crypto index aggregator.

The world’s largest cryptocurrency exchange Binance is reportedly set to acquire the market aggregator in a deal that could conclude this week. The site ranks cryptocurrencies and crypto exchanges by;  market cap, reported trading volume and adjusted volume among other indicators.

Binance to acquire CoinMarketCap

According to reports, Binance is offering cash plus stock for the U.S.-based crypto data platform. A successful bid for the popular platform will become the largest such deal in the nascent crypto space.

The Block suggests that interest in CoinMarketCap is largely due to the platform’s huge web traffic, sources privy to the alleged deal told the publication.

Binance reportedly attracted 113 million visitors over the last 6 months. CoinMarketCap, on the other hand, attracted 207.2 million. That is nearly 80% more traffic than the crypto exchange.

Elsewhere, data on exchange traffic for February shows that Binance got the largest share of visitors at nearly 22%. U.S.-based exchange Coinbase had the next largest share of traffic with 20.3% while BitMEX was third with 11.8%. Most other platforms, including Bithumb, Bitfinex and Kraken saw less than 4% of the traffic.

Binance’s acquisition raises questions on CMC’s impartiality

Binance has netted a few notable deals in the past couple of years, significantly increasing its footprint within the crypto market space. The expansion has seen it make an entry in the U.S. market, while the latest is a new crypto exchange in South Korea.

The CoinMarketCap bid is huge, but several people have voiced concerns that it would be bad for the crypto data and market aggregating site.

According to Larry Cermak, the “acquisition doesn’t make much sense” and will only make people doubt CoinMarketCap’s impartiality even more.  However, he also noted that Binance’s interest is access to more traffic.

Eugene Ng, a former trader at Deutsche Bank and currently with Matrixport as head of sales tweeted that the deal would “make no sense.” According to Ng, a stake would be better as “[the acquisition] defeats the purpose of having a balanced and neutral index aggregator.”

News of the impending acquisition comes just months after Binance CEO Changpeng “CZ” Zhao hinted at major acquisitions in 2020. Among the potential bids were two deals the Binance chief referred to as “major” and very exciting.

This is what CZ told the Binance community in January:

“There are always a number of deals being discussed at any given time, and there are 2 that I am very excited about specifically. We will announce them in due time.”

It now appears that one of these deals could involve CoinMarketCap. However, Binance is yet to make any statement regarding this development.

Featured image courtesy of Shutterstock.

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