The founder of Huobi might receive more than $1 billion from a potential deal, making it one of the biggest in the cryptocurrency sector to date.
Similar to the traditional capital markets, when downtrends stay for a while, markets crash will make companies contract or welcomes the M&A song.
These contractions usually create massive layoffs and closure of branches and or satellite offices across the globe. To survive, which means staying afloat through cash, companies sell significant shares of ownership.
In the recent salvo of downturns in the crypto universe and as aggravated by the growing cases of hacks and attacks, the emerging industry met some hurdles from both ends.
That is, from the government and the market. With this going on, we have expected some players to buckle up and tighten their belts in preparation for anything unexpected.
Some spectators and speculators are abuzz about what a Bloomberg report pictured as a potential merger or sell-off between Huobi, a Seychelles-based crypto exchange with a daily trading volume amounting to around USD. 1 Billion, and two big crypto exchanges which are FTX and Tron.
Though Tron Founder Justin Sun posted on Twitter on August 12: “We have not engaged any matters related to the Bloomberg story at this moment” That report revolves around the story that Huobi founder Leon Li is in talks with the said companies to sell them a majority stake in the company for around USD 3 Billion or more.
It is said to have been near or above 60% of the firm. The existing investors of Huobi are Sequoia China and ZhenFund, which according to the report, was already informed of the talks happening.
It is worth noting to look at the companies with the potential to sell off significant stakes, but it is also worth monitoring the companies buying these companies.
FTX has been known to make several offers to acquire crypto companies.
Japanese Exchange Liquid was acquired in April. FTX also acquired Bitvo, a trading platform based in Canada. FTX has been progressing on a deal to acquire BlockFi, a lending platform for USD 240 million.
To be balanced in evaluating whether the crypto will survive or evolve to survive, need to put on the vantage points of those selling and those on a buying spree.
There are opportunities on the horizon seen by the buyers. As long as these companies see undervalued companies as acquisition targets, the future should look secure and open for more growth.
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