Bitstamp to Expand Globally After Purchase by S. Korean Group
It was revealed on October 29 that the EU's largest crypto exchange, Bitstamp, was bought by NXMH. NXMH is based in Belgium and is part of a company based in South Korea named NXC. Its total value of investments exceeds €2 billion. An interesting point regarding this deal is that NXMH owns Korbit which is Bitstamp’s competitor. Bitstamp, which was established in 2011, is considered the biggest crypto exchange in the European Union based on the volume of its trades and its 1 million active users.
Bitstamp stated that its operations will be held separately from those of Korbit. Nevertheless, the alliance presents an opportunity for both companies to cooperate in various fields that include research, development, and technology.
Results of Unpredictable Rise of Trading Demand
By the end of 2017, the demand on trading escalated dramatically when investors exchanged digital currencies with unprecedented alacrity. Multiple exchanges struggled at that time as they were caught unawares by the crush. It was estimated the big names in the field made millions of dollars per day in fees. Since then, however, the prices and trading demand have subsided due to the rise of doubts from traditional financiers and reservations regarding exploitation and scams.
This resulted in cutbacks for some exchanges and consolidations for others. For instance, Poloniex was purchased by Circle Internet Financial this year.
Acquisition Deal Details
Before the purchase of Bitstamp, its shares were divided almost evenly among three parties. The first two are co-founders: Mr. Nejc Kodric and Mr. Damian Merlak, alongside Pantera Capital, which in 2014, invested around $10 million into the company. After the recent acquisition, NXMH owns an 84% stake and Mr. Kodic keeps 10% while Pantera is limited to only 6%. No additional details about the deal have been released.
Mr. Nejc Kodric revealed to FT that while 4 determined parties had previously offered to buy Bitstamp and that some of them were from America and China, they chose NXMH since both entities have similar views regarding crypto mainstreaming. Adopting digital currencies into the mainstream is not a stunt, but an ever-continuing process.
He also stated that Bitstamp recently added more employees to its development, sales, and project management sectors while it cut back on its customer service dept. He declared his prediction of a considerable increase in profits in 2018 as it witnessed significantly improved trading rates. Finally, he expressed the company’s hopes of expansion across Asia; but said that they will delay that until regulations are more clearly defined and stated that Asia is vague and therefore unpredictable.