Kraken Cracks Into Top 3 Cryptocurrency Exchanges with $4 Billion Valuation After $100 Million Deal
The San San Francisco-based cryptocurrency exchange Kraken has recently purchased the crypto futures broker Crypto Facilities. According to a recent press release, Kraken paid at least $100 million for this company that will be helping Kraken to expand its offering to customers. The digital currency exchange will now be able to offer futures trading rather than just spot trading activities as most of the crypto exchanges.
Crypto Facilities is a company that is regulated by the Financial Conduct Authority (FCA) in the United Kingdom. It provides futures trading for investors all over the world. The firm provides futures on Bitcoin (BTC), Ether (ETH), XRP, Litecoin (LTC), and Bitcoin Cash (BCH). At the same time, the company gave information to the Chicago Mercantile Exchange (CME) regarding Bitcoin price for futures trading.
The decision to purchase this company comes at a moment in which digital currency exchanges are experiencing a very hard moment in the market. Indeed, due to the bear market that affected Bitcoin and most of the digital assets, trading volumes have dropped substantially. Exchanges are trying to find new ways to remain competitive.
In a recent statement, Kraken informed that the company, that is currently working with more than 4 million active users, will have a valuation of $4 billion.
The official press release reads as follows:
“The nine-figure deal is Kraken’s largest acquisition to date and one of the largest the industry has seen. Kraken’s previous acquisitions include major Bitcoin exchanges Coinsetter, Cavirtex and CleverCoin; the award-winning wallet funding service Gildera; and the popular multi-exchange charting, trading and portfolio tracking platform Cryptowatch.”
Crypto Facilities and its developers will be working with Kraken. This would allow the exchange to expand its services and the assets listed on the platform. In the future, the intention is to add more investment vehicles and products.
There are other digital currency exchanges that have similar valuations in the market. Coinbase was able to achieve an $8 billion valuation after securing $300 million from Tiger Global. Furthermore, Binance, the largest crypto exchange in terms of trading volume, completed several funding rounds from different companies.
Now, Binance, Coinbase, and Kraken became the three largest cryptocurrency exchanges in the market. Both Coinbase and Kraken have been working in order to offer the best standards of security to users on the platform since they launched their services.
During a recent interview with Fortune, Powell said that they are ready to complete a $100 million funding round financed by its larger customers. According to him, the company was able to already integrate the back-end operations of Crypto Facilities, meaning that users of services will be able to trade both services in just a single platform.
This will play an important role in attracting new investors, including institutions and traditional players. In order to close this deal, both companies have been discussing for 10 months. Kraken could become a one-stop shop for trading.