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CoinMarketCap to sell to Binance?

#crypto #bitcoin

First reported by The Block, crypto market data site CoinMarketCap (CMC) is rumored to have been acquired by Binance in a deal said to be worth up to $400 million. The dominant narrative is that the purchase would enable Binance to funnel visitors from CoinMarketCap to Binance’s range of trading options. This argument makes sense as research shows CMC has between 2.5 and 5 million unique daily visitors. However, itself is no slouch in the traffic department - averaging between 1 and 1.5 million visits a day to the exchange’s main website.

The problem for Binance is that its attempts to expand its reach to western Europe and the English speaking world have met with limited success. Viewed through the lens of traffic numbers, for example, Binance USA’s estimated 20,000 daily visitors is dwarfed by the 1 million plus hitting Coinbase, and Binance’s European targeted Binance Jersey’s 2000 daily visitors are a fraction of Bitstamp’s 100,000 plus. This is despite Binance enabling USD, Euro and GBP onramps for its exchanges.

The value of CoinMarketCap’s traffic from an advertising perspective puts the company’s valuation (if someone was to purchase it based on its potential revenue from Google Ads) at around $25 million. So If true, the rumored sale price of $400 million shows that Binance is prepared to pay a massive premium for qualified traffic.

The rumor of a Binance purchase of CMC comes at the end of an expansive first quarter for the Malta headquartered exchange. Since January 1st, the company has announced the launch of P2P trading in Latin America supporting the Brazilian Real (BRL), Argentine Peso (ARS), Colombian Peso (COP), Mexican Peso (MXN) and Peruvian Sol (PEN).

The exchange ecosystem has also launched a crypto backed Binance credit card in association with Visa, it has plans for a blockchain research institute in China, a 50 million fund with WazirX called “Blockchain for India” to incubate and invest in blockchain projects and startups, a Binance Korea exchange, and the imminent roll-out of new perpetual futures products on Binance Futures.

Given the current slump in active retail trading, a purchase by Binance of CMC makes sense from the perspective of driving traders to Binance’s ever expanding range of products and exchanges, but the company will need to be careful about its influence over CMC - and the potential impact that might have on CMC’s reputation as an impartial observer of the crypto economy.



News, Khareem Sudlow