Poor market conditions are encouraging a crypto acquisitions spree

Fin is a former junior editor at TechForge.

Two leading crypto firms, Ripple and FTX, have said they are looking to drive growth through acquisitions in interviews with CNBC at the 2022 annual meeting of the World Economic Forum.

The confidence suggests some crypto firms feel established and capitalised enough to weather the market downturn and still spend on acquisitions.

Brett Harrison, president of crypto exchange FTX’s US branch, told CNBC that the company is in “a very good spot in terms of our capital and cash” and plans to “look around the market for potential merger and acquisition opportunities”.

FTX US is particularly on the lookout for companies that will help them accrue more users and regulatory licences.

During the 2020 lockdown, FTX hashed out a deal to acquire trading platform Blockfolio to grow its userbase.

Now, the company seems focused on branching out into stock trading. Last year, FTX US bought futures exchange LedgerX, which came equipped with a number of licences from regulators.

“We’re doing that globally, in places like… Japan, Australia, in Dubai… different places where we’ve been able to either partner with local companies or sometimes do acquisitions to be able to get licenses that we need,” Harrison told CNBC.

In a separate fireside chat, Brad Garlinghouse, the CEO of blockchain payments company Ripple, said the company has a “very strong” balance sheet and anticipates a rise in mergers and acquisitions within the crypto industry.

“We’re now at a stage of growth where I think we’re more likely to be the buyer versus the… seller,” he added.

Mergers and acquisitions in crypto increased fifty-fold in value from $1.1 billion (£874 million) in 2020 to $55 billion (£43.7bn) last year, according to a PwC report.

Although prices have crashed since 2021’s highs, this could potentially lower the value of crypto-related companies and make certain acquisitions more appealing.

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