Rehashed - #10 Takeovers and Technology Continue to Take Centre Stage
NZ Techweek Comes to a Close
That’s a wrap on Techweek NZ, which resulted in over 500 events held across the country. Not only did hologram Jacinda kick things off with a bang, but this week allowed the opportunity to unearth some fairly promising statistics about the current state of technology in New Zealand. NZ’s FinTech industry continues to flourish, currently growing at around 40% a year.
The Ministry of Business, Innovation and Employment (MBIE), in conjunction with the Technology Investment Network (TIN) just released their annual investor guide which further cemented the notion that NZ’s tech sector continues to show strong and sustained growth each year. Data from the report highlighted that New Zealand tech companies received $265 million in funding from overseas companies over the past three years, including high profile investors such as Peter Thiel and Ashton Kutcher.
Complementary to these foreign investment inflows is the implementation of the Edmund Hillary Fellowship (EHF) global impact visa program, which draws international tech talent to New Zealand. Blockchain-related EHF recipients so far include Coinbase co-founder, Fred Ehrsam, Augur founder and Pantera Capital’s Co-Chief Investment Officer, Joey Krug, and blockchain entrepreneur Andrew Hoppin, plus many more expected to be accepted over the next couple of years.
M&A is Here to Stay
If 2017 was the year of the ICO, then 2018 is undoubtedly the year of Mergers and Acquisitions (M&A) in the cryptocurrency space. M&A typically involves one company buying or merging with another company to increase efficiencies, sharpen business focus, eliminate competition and spur growth. With the recent rush of capital raising and exploding revenues, many crypto-firms hold significant capital on their balance sheets. Naturally, M&A has become an increasingly used tactic in the space.
Ever since hiring Linkedin dealmaker, Emilie Choi, Coinbase has been on an acquisition rampage. Paradex, a decentralized relayer, has just been announced as their latest acquisition. Among Coinbase’s previous strategic initiatives (the acquisition of Earn.com, launch of Toshi etc.), the acquisition of Paradex is particularly interesting as it marks the introduction of truly decentralized infrastructure. Relayers like Paradex, allow users to trade with each other through a quotation system and settle directly through their own wallets- in the case of Paradex, Metamask or Ledger. Such acquisitions are exciting as it brings us one step closer to opening up accessibility and empowering the individual in the financial markets.
The acquisition of crypto exchanges is emerging as the early trend. Coincheck- the Japanese exchange that was hacked and robbed of $500 million earlier this year, was acquired by Monex Group, a publicly traded venture firm. The market seemed to think this was a good move, as Monex stock has since doubled over the past month. Also of note is Chinese mining goliath Bitmain’s massive investment in Circle, who themselves acquired retail crypto exchange, Poloniex, just a couple of months ago. In fact, crypto M&A numbers year-to-date have almost matched the number of acquisitions in 2017. The M&A train is not slowing down anytime soon; the space is likely to continue consolidating throughout the next couple of years as companies continue to hunt for competitive advantages.
M&A is not just relegated to the crypto-firms in the traditional sense; is likely that we will see this concept applied to blockchains themselves, where actual network acquisitions will occur. Due to power laws, we are likely to see only a few public blockchains succeed. To optimize for success and increase network effects, M&A could be an advantageous strategy for crypto projects. NEO and ONT just announced a joint task force, whereby they will cooperate to create a smart contract ecosystem. Although this is not a full takeover/merger and the projects have very different properties (NEO is intended to be a public blockchain and ONT a private one), such actions may hint at what is yet to come. Operationally, it’s unclear exactly how network M&A would work, (some believe it’s just not possible) but it’s certainly an interesting concept that we may see more of in the future.
In the News
Coinbase has acquired Paradex, a decentralized relayer that features user self-custody.
In an industry first, Argentinian bank, Banco Masventas, has dumped the international SWIFT system in favour of Bitcoin for international transfers, citing cost benefits.
A version of Pokemon has been released on the Ethereum blockchain, players can pay to purchase pokeballs and capture up to 151 pokemon.
Online bank Revolut is seeing increased volume in Bitcoin, Litecoin and Ethereum traders.
A somewhat mathsy, yet very insightful, breakdown of how transactions on ethereum are calculated and subsequently processed.
In case you missed it, it was “Bitcoin Pizza Day” last week. 8 years ago, 10,000 bitcoin were exchanged for two pizzas in the first known exchange of bitcoin for a consumer product (those bitcoin worth USD $83 million at current prices).
June 1 - Don’t forget to claim your EOS tokens
June 21 - Blockchain Summit Auckland 2018
Thanks for your company, stay tuned for next week’s edition of Rehashed.
View previous issue: Rehashed #9 Parties and Pitches: The Cryptocurrency New Norm
About the author:
Capital markets to crypto convert. From Christchurch → Boston → New York, Freddie became intrigued by the potential of the digital asset economy after plucking a book on Bitcoin off a New York library bookshelf in 2016. Her parents are thrilled that she is chasing magic money on the internet.
Disclaimer: The above references an opinion and is for informational purposes only. The opinions expressed by the author do not represent the opinion of BitPrime.