On October 29th, one of the world’s leading cryptocurrency exchange, Bitstamp, announced that it was acquired by a Belgium-based private equity and investment firm, NXMH.
The announcement didn’t reveal the exact amount the company was sold for, but it is speculated that the deal could be worth as much as $400 million. The investment firm also owns South Korean exchange Korbit.
The deal closed in December 2017 pending regulatory approval
According to the Bitstamp’s CEO, Nejc Kodrič, NXMH was one of four parties interested in Bitstamp. Even though the whole process began in mid-2017, the deal was finally struck last December, while Bitcoin was reaching its all-time high.
However, as it sometimes plays out in the business world, it took most of this year for the companies involved in the deal to receive regulatory approval for the acquisition, and because of that the announcement came out “a year late.”
It is a noteworthy fact that Belgium-based NXMH is a subsidiary of the South Korean technology investment firm, NXC, which, contrary to Kodrič’s recent claims, denied their reported interest in Bitstamp in April.
Bitstamp founder and CEO Kordič to remain at company
While explaining all the details of the deal, Kodrič also mentioned that he wasn’t looking to sell the company he founded with the base capital of €1,000 in 2011.
Since the platform already raised a total of about $12.4 million in investments, spearheaded by Pantera Capital, he also emphasized that Bitstamp was not looking for investment either, but still, he took the opportunity to cash in the majority of his stake.
However, the CEO decided to retain his 10% of Bitstamp’s shares, and since he considers that NXMH shares his vision for the company, will remain on the position of the chief executive officer.
Before acquiring Bitstamp, NXMH was already familiar with the functioning of cryptocurrency exchanges as they already owned a South Korean trading platform, Korbit.
Still, according to the parties, Bitstamp will continue to function as a separate entity, even though crypto exchanges owned by NXMH will share technology, research, and development resources available.
Bitstamp: a “Big Four” exchange
Often referred to as a member of the “big four” cryptocurrency exchanges, Bitstamp, besides raw cryptocurrency trading, offers USD and Euro pairs to its clients, which can be considered as a significant advantage.
The exchange also accommodates its users by enabling them to deposit fiat by debit card, credit card, bank transfer, and wire transfer.
According to Crunchbase, Bitstamp has a yearly revenue of around $4 million, but some sources report that in 2018, NXMH’s newest acquisition is scoring a stunning $400,000 per day, which would if correct, lead to the astonishing $146 million in total at the end of the year.
Currently, Bitstamp operates from Luxembourg, as the country assists crypto-related businesses with a set of friendly regulations. The exchange processed around $68 million in daily volume today, with 48.5% of that volume coming from trading Bitcoin (BTC) against the US dollar (USD).
Although it can be considered a European exchange, BTC/EURO trading contributes only 17.2% to the overall volume, while XRP/USD pair brings another 14.0%.
In the world of cryptocurrencies, exchanges are definitely among the business giants, recording astronomical profits for their owners through the listing, trading, and other fees.
Having in mind that cryptocurrencies are still a very young business, it is not at all strange that the growth potential is more than inviting for big players. Therefore, we doubt that Bitstamp will be the last such acquisition.