According to a report, the two companies have not formalized the negotiation but it could already be in its final stages. They could finalize the deal in the next few days but neither party has spoken.
Unofficial sources reported in recent days that the cryptocurrency exchange house Binance is negotiating the acquisition of CoinMarketCap (CMC). The latter is an information service that is dedicated to tracking the cryptocurrency market in real-time.
People who heard the conversations between the two companies told digital media that the cryptocurrency exchange house would be willing to pay up to USD 400 million for the transaction, which could already be in its final stages. Neither Binance nor CoinMarketCap has confirmed or denied the information, but they could be announcing it within a few days.
According to CoinMarketCap, Malta-based cryptocurrency exchange house Binance has reported the largest volume in the cryptocurrency ecosystem, which makes the potential acquisition relevant. The company led by Changpeng Zhao has a weekly volume of more than USD 22 billion. If the negotiation takes place, it would be one of the most significant transactions within the cryptocurrency industry.
The Block reported that the potential acquisition would be related to statements that Zhao made in January of this year. At that time, he disclosed that Binance was managing two acquisitions, of which he said to be very excited as they would have a significant impact. CoinMarketCap’s ability to generate a significant amount of web traffic would be driving its influence.
Larry Cermak, Research Director at The Block, referred to the potential purchase through his Twitter account. He said that he does not know how Binance is going to deal with the obvious conflict of interest. He added that CoinMarketCap will not continue to be impartial, even though they do not have a good reputation anymore.
Although CoinMarketCap is one of the most popular crypto market tracking services, it has also received questioning. It could be reflecting false figures as a result of possible manipulation by exchange houses. The company itself admitted having incurred those faults and said that it would adopt new measures. In this way, they seek to provide their users with more accurate information about what is occurring in the market.
To encourage greater transparency, CoinMarketCap called, in May 2019, for exchange houses and cryptocurrency-related projects to disseminate reliable and real-time data on their exchanges and order books, among others. Even in November of last year, the company announced that it would apply new liquidity-based metrics to counter the practice of “inflating” reported volumes that startups do.
Among other options that operators have to track the crypto market are the services of OpenMarketCap, Messari, CoinGecko, LiveCoinWatch, and CoinCheckup. Of course, this negotiation with Binance might offer some opportunities to change how OpenMarketCap has been doing its work.
In this way, this service would become a more reliable source of information for those interested in knowing the present situation of the cryptocurrency market.
By Willmen Blanco