Binance Has Engaged in a Big Buy
While the deal is not fully set in stone, an announcement is expected to be made by the end of this week or no later than early next week. Binance CEO Changpeng Zhao teased the merger earlier in the year, explaining to users via newsletter:
As the saying goes, when you can’t beat them, buy them. When we identify top talent with a top product that we cannot beat, and the teams share common values, a merger makes sense in most cases. There are always several deals being discussed at any given time, and there are two that I am very excited about specifically. We will announce them in due time.
The purchase is indeed a big one, but it’s got a lot of people concerned about the future. Larry Cermak, director of research at The Block, explained in a statement that he feels the merger is likely to negatively impact the site’s ability to report coin data. He said:
I wonder how Binance is going to deal with the obvious conflict of interest.
Eugene Ng – head of sales at Matrix Port – offered a similar sentiment, believing that nobody is ever going to take CoinMarketCap.com seriously again. He explains:
Who would ever trust CoinMarketCap.com after this? A stake from Binance might likely work better than an acquisition. This just defeats the purpose of having a balanced and neutral index aggregator.
Many are concerned that the acquisition will place Binance’s own token (known as BNB) ahead of others, and that reporting will always be tailored to make the currency appear larger or more impactful than it really is. While Binance Coin is in the top ten crypto assets, it’s relatively low on that ladder, and its price has remained significantly low for the past several weeks.
CoinMarketCap.com is only one of several acquisitions that Binance has headed in the past year. Nine occurred in 2019 alone, though very few have been announced yet. For the most part, Binance has primarily been focused on building additional headquarters throughout the globe and offering its services to neighboring regions such as the U.S., which now hosts Binance.US – an American division of the exchange.
One of Many Acquisitions
This is Binance’s fifth major acquisition. Despite the negative hype, some believe that should the deal go through, it will qualify as one of the most important events to occur in the crypto and blockchain spaces and should contribute further to the legitimacy and maturity of digital currency.
Binance has been at the heart of several changes in the industry over the past few months. Recently, the company brought Tezos trading to U.S. customers.