On Monday Bitstamp was acquired by NXMH, a Belgium-based investment company. Valuation terms were not disclosed. NXMH is European subsidiary of NXC Corporation, a South Korean holding company that owns Korbit. Korbit is a Korean cryptocurrency exchange with nearly $8.5 million in daily trading volume.
The all-cash deal potentially signals ongoing consolidation in the cryptocurrency industry as it matures. Bitstamp (which has offices in Luxembourg and London) is looking to expand into Asia — where Korbit now operates — if or when the region gains regulatory guidance from governments.
When that takes place is anyone’s guess but Ryan Taylor, CEO of Dash Core, said authorities will need to provide governance frameworks soon. In a statement to Crypto Briefing, Taylor said “I believe that regulators will eventually catch up and will provide businesses with the guidance they need to gain comfort with cryptocurrency.”
Bitstamp CEO Nejc Kodric told Reuters that trading volume has been down 60-70% during this year’s bear market but insists that 2018 would be a profitable year. He posted an Oct. 29 announcement that assured its three million registered users that despite the acquisition, trading operations would continue to function normally.
“Our team, leadership and vision all remain the same. We believe this is the logical next step on our mission to be the most trusted digital currency exchange on the market,” said Kodric, who cofounded Bitstamp in August 2011 out of a garage in Slovenia. What would eventually become Europe’s largest crypto exchange (with daily volume of $100 million) was founded with a thousand euros in capital.
“We … anticipate that this acquisition will strengthen Bitstamp’s positioning for growth,” said Kodric. “Bitstamp has come a long way since we started in a garage with two laptops and EUR 1000 seven years ago.”
NXMH has assets under management worth 2 billion euros. It acquired an 80% stake in Bitstamp in a deal signed Oct. 25. CEO Kodrič retains 10% ownership interest and will continue to run the exchange. Cofounder Damian Merlak sold his entire 30% stake as part of the deal.
In 2016, Bitstamp was valued at $60 million, up from $39 million two years prior. Pantera Capital invested $10 million in 2014 and sold part of its stake to NXMH.
Korean exchange Korbit, the NXC subsidiary, announced the acquisition on Tuesday. “NXC saw the potential of growth for blockchain technology, and believed the exchange for cryptocurrency and blockchain can provide the broadest opportunity as the most valuable platform for development.”
Korbit left open the possibility of leveraging synergies with Bitstamp which would be “based on the strengths of each company.”
The author holds digital assets but none mentioned in this article.