thecoinrepublic.com
This dream can be realized if FTX can beat competition from Binance and Coinbase
- FTX could buy U.S. financial giant Goldman Sachs and exchanges such as Chicago Mercantile Exchange (CME)
- FTX is seeking a valuation of around $20 billion in its latest funding round
- FTX is not actively looking to list
Hong-Kong-based billionaire Sam Bankman-Fried, who is also the FTX CEO, has talked about the possibility of acquiring Goldman Sachs and CME. However, this can happen only when the exchange beats competition from Binance and Coinbase.
Talking to Financial Times on July 14, Bankman-Fried stated that his company FTX could buy U.S. financial giant Goldman Sachs and exchanges such as Chicago Mercantile Exchange (CME) in the coming times. He added that if FTX can upstage rivals like Coinbase and Binance, the idea of purchasing giants such as Goldman Sachs and CME group is not impossible. But Bankman stressed that ‘If we are the biggest exchange,’ this idea [buying Goldman Sachs and CME] can become a reality.
With an estimated wealth of $8.7 billion, the Hong-Kong-based billionaire Sam Bankman-Fried is the founder and the CEO of quantitative trading firm Alameda Research and CEO of the FTX crypto exchange.
Goldman Sachs has an estimated market cap of $129 billion, and the CME group has an estimated market cap of $75.5 billion. <As per data from Macrotrends>
FTX still not big enough to challenge big players
FTX is growing fast, but it is still not big enough to rub shoulders with the other major players in the field. In an interview with Nikkei Asia on June 24, Fried said that FTX is seeking a valuation of around $20 billion in its latest funding round. In other words, it will take some time before FTX will have the financial clout to acquire such big firms.
Fried is not idle, and he has plans to buy smaller and medium-sized ones. He added that a forthcoming funding round would raise funds “primarily from institutions, and noted that” M & A is going to be the most likely use of the funds. The funds will be used to consolidate the retail investor share of the market.
According to Fried, FTX is weighing the benefit of going public. FTX is not actively looking to list, but it also wants to be in a good position financially to go ahead with the plans. Fried added that the company is in a strong place and does not need capital. However, the listing also has other advantages like brand recognition.
It is not surprising to see Bankman-Fried in such an ambitious mood. At the age of 29, the entrepreneur has amassed a multi-billion fortune in the space of three years of entering crypto.FTX is also embarking on an ambitious path ever since its entry into the market in 2019. The company has been on an investment and takeover spree in the last couple of years.
FTX had purchased Blockfolio for $150 million back in August 2020. It also obtained the naming rights of the Miami Heat’s home stadium worth $135 million for the coming 19 years.
Last month, a prominent daily reported that the exchange has sealed a deal for the naming rights for the global esports brand “Team SoloMid,” for $210 million. Interestingly the team’s name was also changed to “TSM FTX.” The exchange also stated on June 24 that it has partnered with MLB to be the pro-baseball league’s official crypto sponsor.
FTX ranks 11th in 24-hour spot volume as per data obtained from Messari. It has processed $206 million in spot volume over the past 24 hours. However, it is nothing compared to Coinbase, whose 24 hours reported volume accounted for $1.6 billion. Binance is facing a lot of regulatory heat, but the exchange is still standing tall among its competitors, with a trading volume of $10.6 billion.