Crypto exchange giant FTX is getting even bigger. Last week, it announced it’s paying $1.4 billion to purchase Voyager Digital, a crypto exchange that filed for bankruptcy in July.
FTX beat out Binance and Wave Financial to take over Voyager, which had $2.6 billion in assets under management, over 1.7 million users, and 665,000 customer accounts.
The move is just the latest example of FTX’s growing reach in the crypto industry.
FTX is becoming a behemoth
As of the end of 2021, FTX was already a top-10 global exchange, based on trading volume of around $720 billion and just over $1 billion in total revenue. Plus, it has roughly 1 million users.
Based on the latest numbers, FTX is now No. 3 in terms of crypto trading volume—ranking behind Binance and Coinbase.
By buying Voyager, FTX is adding $1–2 billion worth of crypto accounts… and thousands of customers who will be grateful to regain access to their frozen funds.
But Voyager isn’t the only company getting scooped up by FTX…
In late July, it said it would provide a big loan to another struggling crypto firm, BlockFi. The deal gives FTX the option to buy the whole company at some point in the future.
BlockFi was a pioneer in the crypto lending space, allowing clients to use cryptocurrencies as collateral for cash loans. Its business boomed… until U.S. regulators forced it to halt operations in February 2022.
As its cash holdings ran low, BlockFi turned to FTX for a $400 million loan (technically a credit line), which will help it tread water for a few more months.
Keep in mind: Even after having its business frozen, BlockFi was worth more than $1 billion as of June 2022.
In short, FTX could soon add BlockFi to its arsenal of crypto businesses…which translates to a bigger user base and more assets under management.
In fact, Frank interviewed BlockFi CEO Zac Prince in a March 2021 episode of Wall Street Unplugged.
It’s also worth noting that FTX made another key acquisition last October, when it bought crypto futures exchange LedgerX for an undisclosed amount. The purchase gave FTX a boatload of licenses granted by the U.S. Commodity Futures Trading Commissions, which set the stage for FTX to offer crypto futures and options trading.
And this summer, the NBA approved the company’s purchase of the naming rights to Miami’s American Airlines Arena… which is now the FTX Arena. FTX paid $135 million for this privilege.
The bottom line
By buying all these crypto-related businesses, FTX is setting itself up to become a Goldman Sachs-type giant in the crypto space… with business lines stretching across crypto trading, loans, and asset management.
FTX is a powerful exchange looking to become the face of the industry. And it could end up being one of the biggest winners as we come out of the 2022 crypto bear market.
Robinhood’s new wallet opens the door for massive growth
Robinhood is making a huge push towards expanding crypto access for its 20 million-plus users.
Last week, the popular brokerage released the latest version of its new crypto wallet, which includes tradable cryptocurrencies.
For now, it’s in beta (trial) mode and will only be available to about 10,000 users. But it will open the door to massive new growth for Robinhood once it releases its wallet internationally. Currently, Robinhood’s brokerage business is limited to the U.S. and U.K.
Put simply, Robinhood’s new crypto wallet could be a game-changer for the company… giving it access to 10x as many customers as it currently has.
Got a question about digital assets? Let me know here.
P.S. Now’s the time to start building positions in explosive crypto plays that could soar as the market rebounds…
Learn how to get exposure to Frank’s favorites in the space.
