Five major acquisitions of crypto companies this year

The blockchain industry is booming, and competition between market companies is fierce. As a result, the big players take advantage to strengthen their influence. This year, there were five major acquisitions of specialized companies, along with a lot of other smaller mergers.

ConsenSys acquires Infura

Last week, ConsenSys acquired Infura, a service that hosts Ethereum and IPFS nodes, which gives developers access to the network. This acquisition was not surprising, as ConsenSys considered Infura as a partner from the beginning. However, taking over Infura may be an alarm signal regarding centralization.

Infura is used by thousands of blockchain developers and manages billions of requests every day. In combination with ConsenSys significant role in Ethereum development, this crypto acquisition could concentrate too much power in one place.

CoinMarketCap acquires Hashtag Capital

In June, CoinMarketCap made its first acquisition – the Hashtag Capital start-up, which developed an algorithm for calculating the “real price of cryptocurrencies”. It uses market liquidity information to calculate the correct price of tokens. In August, CoinmarketCap introduced a new liquidity criterion on its website.

This acquisition is important because, like many other market aggregators and price sites, CMC data is often called into question. Wash trading, fake volumes and artificially inflated data can cause aggregator problems. As an isolated event, Hashtag activity is minor, but significant when associated with other improvements implemented by CoinMarketCap.

Coinbase purchases Neutrino

In February, Coinbase acquired Neutrino, a start-up specialized in blockchain analysis. The Neutrino team was tasked with investigating ransomware attacks, preventing thefts and identifying bad actors. Coinbase also indicated that Neutrino will help comply with regulations and legal compliance.

The acquisition, however, has sparked controversy, as some of the Neutrino employees have previously developed surveillance tools for authoritarian governments. Coinbase finally decided to fire those people, which is considered a success of the crypto community in the fight against censorship.

Facebook acquires Chainspace

In February, Facebook bought Chainspace, a blockchain startup specializing in smart contract sharding, scalability and transaction efficiency. The news was lost in the whirlwind of the announcement regarding the Libra stable cryptocurrency project.

But cynics say that Facebook is seeking to strengthen itself by grabbing competition. This trend may become more prevalent, as major technology companies are increasingly interested in blockchain and crypto.

Binance purchases JEX

Last month, Binance acquired JEX, a crypto derivatives trading platform. Initially, the plan was to use JEX to offer derivative transactions. Later, Binance released two platform versions of futures contracts and released a hybrid version in mid-September.

Currently, Binance is looking to become a competitor to Bakkt and platforms such as BitMEX and Kraken. Bakkt had a slow start, while Kraken launched its own futures platform this year.

These are just some of the most notable acquisitions this year, but there were others. For example, Bakkt acquired the DACC crypto-custody provider in April. More recently, RSK has acquired the social media company Taringa, while Ripple has just expanded to Iceland by acquiring the broker Algrim.

The consolidation trend will continue on the crypto market

All of these acquisitions are in line with those of last year – TRON acquired BitTorrent in mid-2018, Circle bought the Poloniex exchange, a popular exchange, and Binance acquired the Trust portfolio.

Since October 2018, there have been dozens of acquisitions of blockchain and crypto start-ups. It is unclear what value these acquisitions had, but based on past data, it is likely to be hundreds of millions of dollars in total.

On the one hand, these five major acquisitions of companies are beneficial because they allow large companies to bring new talent and technology. At the same time, start-ups gain exposure and financial resources. On the other hand, the crypto market is following the example of the financial market and the big players are trying to consolidate their power.