DeFi: Crypto media on sale as Coindesk sold to EOS exchange Bullish & The Block acquired for $70MM
Will owning a major media outlet allow Bullish to influence public perception or grow top-of-funnel?
Gm Fintech Futurists —
Today we highlight the following:
CAPITAL MARKETS: Crypto Exchange Bullish Completes Purchase Of CoinDesk (link here)
CURATED UPDATES: Financial Institutions and Adoption; DeFi and Digital Assets; Blockchain Protocols; NFTs, DAOs and the Metaverse
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CAPITAL MARKETS: Crypto Exchange Bullish Completes Purchase Of CoinDesk (link here)
Block One's subsidiary Bullish has completed an all-cash buyout of CoinDesk from Digital Currency Group (DCG). DCG had been actively seeking a buyer since January to plug a multi-billion dollar balance sheet hole as a result of the collapse of Genesis, the lender to bankrupt funds 3AC and others, as well as the structural market problems with its historically popular Grayscale Investment Trust. Binance expressed interest, and in July, a group of investors, led by Matthew Roszak of Tally Capital, made an attempt to acquire CoinDesk for $125MM. But neither of the deals materialized.
Bullish is owned by Block One, which created an early Ethereum challenger EOS that raised $4B in 2018. The ICO is perceived as a net drain on the industry — it ran for over a year, pulling in ETH liquidity while executing the fund raise on Ethereum to build a competitor. The tokens were deemed to be illegal securities offerings by the SEC, and EOS paid a $24MM fine for this pleasure.
Further, the EOS promises were never made real. The network peaked at $16B in value in 2018, trading now at around $800MM. To seed it with software, the team allocated funds to other ventures, including Bullish and social media platform Voice. Block One invested $150MM into Voice, which aimed to combine features of Twitter, Facebook, Steemit, and Brave. While on-chain social networking is an interesting direction, Voice did not catch on, then transformed into an NFT platform, and finally shut down in September.
Bullish, a crypto exchange based in Gibraltar, is another one of Block One’s projects, and leverages a private version of the EOS chain for trade execution. It was initially projected to be valued at $9B through a SPAC plan, to be raised largely on expected rather than live traction. Despite offering spot trading for only 23 cryptocurrencies, the crypto exchange has a reported daily trade volume of around $1.5B, which — if accurate — would surpass Kraken and approach Coinbase’s $2.2B. We assume nearly all this trading is institutional, and that some of the liquidity is the company’s own balance sheet.
The CoinDesk deal comes at an intriguing time, considering media company The Block just sold 80% of its stake to Foresight Ventures for $56MM. Foresight also owns crypto media companies BlockTempo (in Mandarin) and CoinNess (in Korean). The market is telling us that, while media controls attention and is enormously influential, shrinking sponsorship revenues create a lot of pressure in a bear market.
Owning a major media outlet provides Bullish with a platform to influence public perception and grow top-of-funnel that converts into trading. At 2.2MM visits per month or 25MM per year, TheBlock valuation is $3 per visit. This is also reminiscent of Binance acquiring CoinMarketCap for $400MM in 2020. That site generates 70MM in monthly traffic, so we can derive $0.50 per visit on public numbers. CoinDesk may have 100MM or so visits per year, as well as a profitable conference business, but was likely less expensive, even though it generates an annual revenue of $50MM.
When it comes to direct integration with Bullish, CoinDesk's index business could provide valuable benchmark data and analysis for integration into Bullish's offerings, such as its upcoming perpetual futures service. With these new developments and comparables, we expect to see other crypto media players raise funds or go through reorganizations in the coming months.
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Curated Updates
Here are the rest of the updates hitting our radar.
Financial Institutions and Adoption
⭐ Binance To Pay $4.3B To Settle U.S. Criminal Case; Changpeng 'CZ' Zhao Resigns As CEO And Pleads Guilty In Seattle - The Defiant
SEC Sues Kraken Alleging Unlicensed Securities Trades And ‘Commingling’ Of Customer Funds - The Defiant
Aave Companies Rebrands As Avara To Reflect The DeFi Giant's Multiple Holdings - The Defiant
KPMG Canada Teams Up With Chainalysis To Fight Crypto Frauds And Exploits - CoinDesk
Genesis Sues Gemini to Recover 'Preferential Transfers' Worth $689MM - CoinDesk
DeFi and Digital Assets
⭐ Paradigm Leads $18MM Series A Raise For Web3 Infrastructure Startup Privy - The Block
⭐ Tron’s JustLend Surpasses Aave As Largest Web3 Lending Market - The Defiant
CoinGecko Acquires NFT Data Startup Zash - Blockworks
Celsius Network Shifts Focus To Bitcoin Mining Following Bankruptcy - Decrypt
Pyth Network Token Goes Live With $75MM Airdrop For DeFi Users - The Defiant
Expanso, A Distributed Data Processing Startup Led By Google And Microsoft Vets, Raises $7.5MM - GeekWire
Huobi’s ‘Heco’ Chain Bridge Drained Of $87MM In Crypto Assets - Blockworks
Blockchain Protocols
⭐ Vitalik Advocates For Renewed Exploration Into Plasma-Based Scaling Solutions - The Defiant
⭐ Blur Founder's Ethereum Layer 2 Blast Goes Live In Early Access After $20MM Raise - The Block
⭐ Taproot Wizards Raises $7.5MM For Its Ordinals Project To Bring The ‘Magic’ Back To Bitcoin - TechCrunch
Polkadot is About to "Fundamentally Change," Said Web3 Foundation's New CEO - The Defiant
Ethereum Validators Are Now Queuing To Exit The Network - The Defiant
Upstart Layer 2 Blast Draws In $100MM With Airdrop Scheme - The Defiant
NFTs, DAOs and the Metaverse
Uniswap DAO To Weigh Giving ‘Underrepresented’ Delegates More Voting Power - Blockworks
World’s First Blockchain Creators Celebrate History With NFT Mints On Kadena - nftnow
Delegate’s New Marketplace Lets You Sell Your NFT’s Utility - nftnow
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