DOCSLIB.ORG

Pwc I 2Nd Global Crypto M&A and Fundraising Report

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Pwc I 2Nd Global Crypto M&A and Fundraising Report 2nd Global Crypto M&A and Fundraising Report April 2020 2 PwC I 2nd Global Crypto M&A and Fundraising Report Dear Clients and Friends, We are proud to launch the 2nd edition of our Global Crypto M&A and Fundraising Report. We hope that the market colour and insights from this report will be useful data points. We will continue to publish this report twice a year to enable you to monitor the ongoing trends in the crypto ecosystem. PwC has put together a “one stop shop” offering, focused on crypto services across our various lines of services in over 25 jurisdictions, including the most active crypto jurisdictions. Our goal is to service your needs in the best possible way leveraging the PwC network and allowing you to make your project a success. Our crypto clients include crypto exchanges, crypto investors, crypto asset managers, ICOs/IEOs/STOs/stable and asset backed tokens, traditional financial institutions entering the crypto space as well as governments, central banks, regulators and other policy makers looking at the crypto ecosystem. As part of our “one stop shop” offering, we provide an entire range of services to the crypto ecosystem including strategy, legal, regulatory, accounting, tax, governance, risk assurance, audit, cybersecurity, M&A advisory as well as capital raising. More details are available on our global crypto page as well as at the back of this report. 2nd Global Crypto M&A and Fundraising Report April 2020 PwC 2 3 PwC I 2nd Global Crypto M&A and Fundraising Report 5 Key takeaways when comparing 2018 vs 2019 There was a sharp decline in deal volume and value for crypto fundraising and M&A in 2019, and investments have been shifted towards Asia / EMEA and into more diversified sectors The crypto winter continued in 2019 for Asia and EMEA are now home to the There has been increased diversification crypto fundraising and M&A, with both the majority of crypto fundraising and M&A of the sectors encountering investment number and value of deals falling deals activity, with a clear shift towards crypto solutions and peripheral sectors Deal counts and value1 Deals by geography Deals by Sector Fundraising & M&A Fundraising & M&A combined, number of Fundraising & M&A count Value 3.8b 2.2b -40% 1.9b 0.5b -76% (US$) Fundraising Count M&A Count 662 189 -18% 851 1% 10% 19% 19% 540 654 44% 3% 2% 22% 28% 26% 22% 22% 114 3% 51% 15% 20% 19% -40% 29% Counts 662 26% 15% 28% 540 16% 17% 55% 20% 48% 189 30% 114 31% 26% 29% 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 Fundraising M&A Americas APAC EMEA N/ANA2 Solutions (Compliance and reg., Mining Payment, Wallet) Trading (Trading infra. & Crypto Other & peripherals Notes: 1) Only includes deals with disclosed data and excludes potential fraud deals; 2) Not disclosed Exchange.) (Media, Consul. & Research etc.) Source: MergerMarket, Capital IQ, Crunchbase, Pitchbook, PwC Analysis Blockchain infra. 4 PwC I 2nd Global Crypto M&A and Fundraising Report 5 Key takeaways when comparing 2018 vs 2019 The crypto industry continued to consolidate and mature in 2019, with funds going to later stage companies As the crypto industry continued to mature, fundraising The consolidation in the crypto industry continued in 2019 has trended towards later-stage companies with crypto incumbents driving most of the activity. 9 out of the top 10 deals were strategic in nature and driven by other crypto companies or crypto focused funds Equity fundraising of crypto companies M&A of crypto companies Deal count (number of) by transaction type Buyers count 662 192 8% 11% 1% 1% Post-seed 540 6% 5% 4% 3% 15% 5% 7% 7% 2% 7% Post-seed 16% 6% 23% 114 10% 8% 1% 11% 18% 3% 4% 2% 11% 16% 71% 59% 42% 56% 2018 2019 2018 2019 Crypto /Blockchain Other Tech Others Crypto focused Seed NA1 – Early stage Series A Series B+ companies companies and VCs & Funds Startups NA1 – Late stage NA2 Established Traditional VCs, PE and Hedge Private Corporates & incubators and funds investors3 Corporate VCs family offices Notes: 1) Specific stage was not disclosed 2) Not disclosed 3) Individuals Source: MergerMarket, Capital IQ, Crunchbase, Pitchbook, PwC Analysis Undisclosed 5 PwC I 2nd Global Crypto M&A and Fundraising Report 3 Trends to watch for in 2020 Crypto industry not immune to Further consolidation to take APAC and EMEA to continue global macro economic conditions place in 2020 playing a bigger role driven in part by family offices • The global headwinds caused by • As a consequence of the turbulences in • 2019 saw APAC and EMEA play a the Coronavirus and other related the global crypto ecosystem and as a bigger role in the global crypto M&A events are having an impact on continuation of the current trend, we and fundraising space. We expect to many industries globally, including expect to see further consolidation in see this trend to continue in 2020. the crypto industry. the industry with some of the larger well • In particular, we expect to see more • We believe that the crypto industry funded or profitable firms buying some activity from APAC and EMEA based is not immune to these conditions of the smaller players in the market. family offices looking at the market and the number and value of • We expect to see some of the larger turbulence as a good time to enter the fundraising and M&A deals may be players buy firms that offer ancillary market. impacted as a consequence in services to their current offering 2020. (e.g. crypto media, compliance, research). PwC 6 PwC I 2nd Global Crypto M&A and Fundraising Report Fundraising PwC 7 PwC I 2nd Global Crypto M&A and Fundraising Report Equity fundraising of crypto companies Equity fundraising of crypto companies Crypto Fundraising Global deal count (number of) Global deal value1, USD in bn Global Landscape The crypto winter continued -18% -40% for part of 2019, with the number of equity fundraising 3.72 deals for crypto related 662 companies decreasing by 18% 540 2019 vs 2018 and the value of 2.24 fundraising deals decreasing by 40% to US$2.24 billion. The rise in the price of Bitcoin 2018 2019 2018 2019 in Q2 and Q3 2019, and the 10.0m 10.2m 2018 2019 Average deal size associated interest in “crypto of disclosed deals:1 assets” did not yet materialise by way of increased new capital into the industry. Note: 1)Deal values include only deals with available data Source: MergerMarket, Capital IQ, Crunchbase, Pitchbook, PwC Analysis 8 PwC I 2nd Global Crypto M&A and Fundraising Report Equity fundraising of crypto companies Crypto Fundraising Deal count (number of) by geography Deal Count by 662 Geography 1% 20% 540 2% Whilst the Americas continue 22% 27% to dominate crypto fundraising activity, there was a shift 30% towards Asia and EMEA in 2019 52% 46% 2018 2019 Americas EMEA APAC Undisclosed Source: MergerMarket, Capital IQ, Crunchbase, Pitchbook, PwC Analysis 9 PwC I 2nd Global Crypto M&A and Fundraising Report Whilst 2018 saw significant crypto fundraising going in to blockchain infrastructure projects, we are seeing Crypto Fundraising a rise of investments in crypto exchanges and solutions for the crypto ecosystem, in particular the compliance Deal Count by and regulatory solutions sector. This is another natural Sector consequence of the institutionalization of the industry. Equity fundraising of crypto companies Deal count (number of) by categories 662662 19% 540540 3% 6% 22% 6% 26% 3% 13% 7% 9% 11% 28% 12% 30% 18% 13% 31% 19% 22% 15% 2018 2019 Other Mining Wallet Compliance & Reg. Payments Crypt. Exchange Trading Infra. Blockchain Infra. Solutions Trading Source: MergerMarket, Capital IQ, Crunchbase, Pitchbook, PwC Analysis 10 PwC I 2nd Global Crypto M&A and Fundraising Report Equity fundraising of crypto companies Crypto Fundraising Deal count (number of) by transaction type Deal Count by 662 Transaction Type 11% Post-seed 5% 540 3% 15% 7% 7% 2% 7% Post-seed The crypto industry continues to 6% 23% mature with post-seed funding 10% 11% becoming a larger portion of overall crypto fundraising 71% activity. 59% 2018 2019 Seed Undisclosed – Early stage Series A Series B+ Undisclosed – Late stage Undisclosed Source: MergerMarket, Capital IQ, Crunchbase, Pitchbook, PwC Analysis 11 PwC I 2nd Global Crypto M&A and Fundraising Report Traditional VCs, incubators and family offices continue Crypto Fundraising to remain the major source of funding for crypto companies. This said, there has been a rise in funding Deal Count by from established corporates in 2019, an example being Investor Type Fnality International’s fundraise that pulled 14 established banks together. Equity fundraising of crypto companies Investors by type 1,430 14% 1,208 5% 2% 11% 3% 2% 6% 5% 1% 2% 6% 15% 7% 10% 17% 24% 37% 33% 2018 2019 Traditional VCs, incubators and family offices Crypto focused VCs & Funds Private investors1 Crypto/ Blockchain companies Established Corporates & Corporate VCs Other Tech companies and Startups PE and Hedge funds Others Undisclosed Notes: 1) Individual investors Source: MergerMarket, Capital IQ, Crunchbase, Pitchbook, PwC Analysis 12 PwC I 2nd Global Crypto M&A and Fundraising Report Equity fundraising of crypto companies Top 10 Crypto Deal count (number of) by categories* Announce Amount Target Fundraising Deals Date Target Lead investor (USD in mn) Series Sector Country 07/08/18 Bitmain Crimson Ventures 715 Series B Mining China in 2018 Trading 10/05/18 Robinhood DST Global 363 Series D United States Infrastructure Tiger Global 30/10/18 Coinbase 300 Series E Wallets United States Management Trading In 2018, mining, crypto 09/08/18 tZERO GSR Capital 270 Growth United States Infrastructure exchange and infrastructure Crypto United 26/04/18 Revolut DST Global 250 Series C were the dominant sectors, Exchange Kingdom Andreessen BlockTower accounting for 6 out of the top 04/01/18 Horowitz, Union 140 Unknown Other United States Capital 10 fundraising deals… Square Ventures Trading 15/05/18 Circle Bitmain 110 Series E United States Infrastructure Blockchain 27/09/18 Seba Crypto Undisclosed 104 Unknown Switzerland Infrastructure Compliance & 18/01/18 Ledger Draper Esprit 75 Series B France Regulation 24/07/18 BlockFi Galaxy Digital LP 52.5 Unknown Other United States Note*: Based on information from online databases as well as media reports.
Load more

Recommended publications
  • Detecting Roles of Money Laundering in Bitcoin Mixing Transactions: a Goal Modeling and Mining Framework
    ORIGINAL RESEARCH published: 06 July 2021 doi: 10.3389/fphy.2021.665399 Detecting Roles of Money Laundering in Bitcoin Mixing Transactions: A Goal Modeling and Mining Framework Mingdong Liu 1, Hu Chen 2 and Jiaqi Yan 3* 1School of Economics and Management, Southeast University, Nanjing, China, 2School of Software Engineering, South China University of Technology, Guangzhou, China, 3School of Information Management, Nanjing University, Nanjing, China Cryptocurrency has become a new venue for money laundering. Bitcoin mixing services deliberately obfuscate the relationship between senders and recipients, making it difficult to trace suspicious money flow. We believe that the key to demystifying the bitcoin mixing services is to discover agents’ roles in the money laundering process. We propose a goal- oriented approach to modeling, discovering, and analyzing different types of roles in the agent-based business process of the bitcoin mixing scenario using historical bitcoin transaction data. It adopts the agents’ goal perspective to study the roles in the bitcoin money laundering process. Moreover, it provides a foundation to discover real- world agents’ roles in bitcoin money laundering scenarios. Edited by: Keywords: goal modeling, money laundering, bitcoin mixing transactions, data analysis, agents’ roles Xiao Fan Liu, City University of Hong Kong, SAR China INTRODUCTION Reviewed by: Daning Hu, Financial crimes not only directly disturb the national financial order and affect social stability Southern University of Science and but also occur with other crimes to provide financial support for various types of organized Technology, China fi Hong-Liang Sun, crimes. Money laundering is a nancial criminal activity, which mainly refers to the processing Nanjing University of Finance and of illegal income by various means to cover up and conceal its source and nature.
    [Show full text]
  • Beauty Is Not in the Eye of the Beholder
    Insight Consumer and Wealth Management Digital Assets: Beauty Is Not in the Eye of the Beholder Parsing the Beauty from the Beast. Investment Strategy Group | June 2021 Sharmin Mossavar-Rahmani Chief Investment Officer Investment Strategy Group Goldman Sachs The co-authors give special thanks to: Farshid Asl Managing Director Matheus Dibo Shahz Khatri Vice President Vice President Brett Nelson Managing Director Michael Murdoch Vice President Jakub Duda Shep Moore-Berg Harm Zebregs Vice President Vice President Vice President Shivani Gupta Analyst Oussama Fatri Yousra Zerouali Vice President Analyst ISG material represents the views of ISG in Consumer and Wealth Management (“CWM”) of GS. It is not financial research or a product of GS Global Investment Research (“GIR”) and may vary significantly from those expressed by individual portfolio management teams within CWM, or other groups at Goldman Sachs. 2021 INSIGHT Dear Clients, There has been enormous change in the world of cryptocurrencies and blockchain technology since we first wrote about it in 2017. The number of cryptocurrencies has increased from about 2,000, with a market capitalization of over $200 billion in late 2017, to over 8,000, with a market capitalization of about $1.6 trillion. For context, the market capitalization of global equities is about $110 trillion, that of the S&P 500 stocks is $35 trillion and that of US Treasuries is $22 trillion. Reported trading volume in cryptocurrencies, as represented by the two largest cryptocurrencies by market capitalization, has increased sixfold, from an estimated $6.8 billion per day in late 2017 to $48.6 billion per day in May 2021.1 This data is based on what is called “clean data” from Coin Metrics; the total reported trading volume is significantly higher, but much of it is artificially inflated.2,3 For context, trading volume on US equity exchanges doubled over the same period.
    [Show full text]
  • Optimal Execution in Cryptocurrency Markets
    Claremont Colleges Scholarship @ Claremont CMC Senior Theses CMC Student Scholarship 2020 Optimal Execution in Cryptocurrency Markets Ethan Kurz Follow this and additional works at: https://scholarship.claremont.edu/cmc_theses Part of the Finance Commons, and the Mathematics Commons Recommended Citation Kurz, Ethan, "Optimal Execution in Cryptocurrency Markets" (2020). CMC Senior Theses. 2387. https://scholarship.claremont.edu/cmc_theses/2387 This Open Access Senior Thesis is brought to you by Scholarship@Claremont. It has been accepted for inclusion in this collection by an authorized administrator. For more information, please contact [email protected]. Claremont McKenna College Optimal Execution in Cryptocurrency Markets submitted to Professor Benjamin Gillen and Professor Chiu-Yen Kao written by Ethan Kurz Senior Thesis Spring 2020 May 11, 2020 Acknowledgements I would like to thank my family and friends for keeping my spirits up and being a great support system. I would also like to extend my deepest gratitude towards my thesis readers, Professor Benjamin Gillen and Professor Chiu-Yen Kao for their patience and thoughtful guidance throughout this process. Contents 1 Abstract 1 2 Introduction 2 3 Literature Review 6 3.1 Stock Market Microstructure . .6 3.2 Cryptocurrency Market Microstructure . .8 3.3 Microstructure in Almgren-Chriss . 11 4 Almgren-Chriss model 14 4.1 The “Efficient Frontier" . 14 4.2 Optimal Strategies . 14 4.3 Comparative Statics . 15 4.4 NYSE Stock Parameters and Models . 18 5 Empirical Analysis of Cryptocurrency Markets 23 5.1 Choosing Parameters and Modeling . 23 5.2 Comparison of the Markets . 25 5.2.1 Consumer Value Provided by Coinbase .
    [Show full text]
  • Regulatory Implications Stripe, Uber, Spotify, Coinbase, and Xapo
    paper says that this backing separates Libra from stablecoins “pegged” to various assets or currencies. Regulatory Update The Libra Reserves will be managed by the June 24, 2019 Libra Association – an “independent” non-profit organization founded to handle In this update, we talk about Facebook’s Libra governance and operate the validator Libra whitepaper, a FINRA enforcement nodes of the Libra Blockchain. Members action for undisclosed cryptocurrency pay a $10 million membership fee that mining, and South Korean crypto exchanges changing their terms to take entitles them to one vote and liability for hacks. proportionate dividends earned from interest off the Reserves.1 Its 27 “Founding ​ Members” include Facebook through its ​ Facebook Releases Whitepaper newly-formed subsidiary Calibra (more on for its Libra Blockchain: Calibra below), Mastercard, PayPal, Visa, Regulatory Implications Stripe, Uber, Spotify, Coinbase, and Xapo. It hopes to have 100 members by Facebook’s Libra Association released its mid-2020. highly-anticipated whitepaper describing its ​ plans to create “a simple global currency Will Libra Answer Gaps in Regulation? …designed and governed as a public The paper argues that the present financial good” in order to make money transfer as system is plagued by shortfalls to which easy and cheap as sending a text message. blockchain and cryptocurrency projects According to the paper, a unit of currency have failed to provide a suitable remedy. It will be called “Libra” and built on the open asserts that many projects have attempted source Libra Blockchain (a permissioned to “bypass regulation as opposed to blockchain that may transition to a permissionless system in the future).
    [Show full text]
  • The Economic Limits of Bitcoin and the Blockchain∗†
    The Economic Limits of Bitcoin and the Blockchain∗† Eric Budish‡ June 5, 2018 Abstract The amount of computational power devoted to anonymous, decentralized blockchains such as Bitcoin’s must simultaneously satisfy two conditions in equilibrium: (1) a zero-profit condition among miners, who engage in a rent-seeking competition for the prize associated with adding the next block to the chain; and (2) an incentive compatibility condition on the system’s vulnerability to a “majority attack”, namely that the computational costs of such an attack must exceed the benefits. Together, these two equations imply that (3) the recurring, “flow”, payments to miners for running the blockchain must be large relative to the one-off, “stock”, benefits of attacking it. This is very expensive! The constraint is softer (i.e., stock versus stock) if both (i) the mining technology used to run the blockchain is both scarce and non-repurposable, and (ii) any majority attack is a “sabotage” in that it causes a collapse in the economic value of the blockchain; however, reliance on non-repurposable technology for security and vulnerability to sabotage each raise their own concerns, and point to specific collapse scenarios. In particular, the model suggests that Bitcoin would be majority attacked if it became sufficiently economically important — e.g., if it became a “store of value” akin to gold — which suggests that there are intrinsic economic limits to how economically important it can become in the first place. ∗Project start date: Feb 18, 2018. First public draft: May 3, 2018. For the record, the first large-stakes majority attack of a well-known cryptocurrency, the $18M attack on Bitcoin Gold, occurred a few weeks later in mid-May 2018 (Wilmoth, 2018; Wong, 2018).
    [Show full text]
  • The Bitcoin Trading Ecosystem
    ArcaneReport(PrintReady).qxp 21/07/2021 14:43 Page 1 THE INSTITUTIONAL CRYPTO CURRENCY EXCHANGE INSIDE FRONT COVER: BLANK ArcaneReport(PrintReady).qxp 21/07/2021 14:43 Page 3 The Bitcoin Trading Ecosystem Arcane Research LMAX Digital Arcane Research is a part of Arcane Crypto, bringing LMAX Digital is the leading institutional spot data-driven analysis and research to the cryptocurrency exchange, run by the LMAX Group, cryptocurrency space. After launch in August 2019, which also operates several leading FCA regulated Arcane Research has become a trusted brand, trading venues for FX, metals and indices. Based on helping clients strengthen their credibility and proven, proprietary technology from LMAX Group, visibility through research reports and analysis. In LMAX Digital allows global institutions to acquire, addition, we regularly publish reports, weekly market trade and hold the most liquid digital assets, Bitcoin, updates and articles to educate and share insights. Ethereum, Litecoin, Bitcoin Cash and XRP, safely and securely. Arcane Crypto develops and invests in projects, focusing on bitcoin and digital assets. Arcane Trading with all the largest institutions globally, operates a portfolio of businesses, spanning the LMAX Digital is a primary price discovery venue, value chain for digital nance. As a group, Arcane streaming real-time market data to the industry’s deliver services targeting payments, investment, and leading indices and analytics platforms, enhancing trading, in addition to a media and research leg. the quality of market information available to investors and enabling a credible overview of the Arcane has the ambition to become a leading player spot crypto currency market. in the digital assets space by growing the existing businesses, invest in cutting edge projects, and LMAX Digital is regulated by the Gibraltar Financial through acquisitions and consolidation.
    [Show full text]
  • Bitcoin Microstructure and the Kimchi Premium
    Bitcoin Microstructure and the Kimchi Premium Kyoung Jin Choi∗ Alfred Lehary University of Calgary University of Calgary Haskayne School of Business Haskayne School of Business Ryan Staufferz University of Calgary Haskayne School of Business this version: April 2019 ∗Haskayne School of Business, University of Calgary, 2500 University Drive NW, Calgary, Alberta, Canada T2N 1N4. e-mail: [email protected] ye-mail: [email protected] ze-mail: [email protected] Bitcoin Microstructure and the Kimchi Premium Abstract Between January 2016 and February 2018, Bitcoin were in Korea on average 4.73% more expensive than in the United States, a fact commonly referred to as the Kimchi pre- mium. We argue that capital controls create frictions as well as amplify existing frictions from the microstructure of the Bitcoin network that limit the ability of arbitrageurs to take advantage of persistent price differences. We find that the Bitcoin premia are positively re- lated to transaction costs, confirmation time in the blockchain, and to Bitcoin price volatility in line with the idea that the delay and the associated price risk during the transaction period make trades less attractive for risk averse arbitrageurs and hence allow prices to diverge. A cross country comparison shows that Bitcoin tend to trade at higher prices in countries with lower financial freedom. Finally unlike the prediction from the stock bubble literature, the Kimchi premium is negatively related to the trading volume, which also suggests that the Bitcoin microstructure is important to understand the Kimchi premium. Keywords: Bitcoin, Limits to Arbitrage, Cryptocurrencies, Fintech 1 Introduction I think the internet is going to be one of the major forces for reducing the role of government.
    [Show full text]
  • An Investigative Study of Cryptocurrency Abuses in the Dark Web
    Cybercriminal Minds: An investigative study of cryptocurrency abuses in the Dark Web Seunghyeon Leeyz Changhoon Yoonz Heedo Kangy Yeonkeun Kimy Yongdae Kimy Dongsu Hany Sooel Sony Seungwon Shinyz yKAIST zS2W LAB Inc. {seunghyeon, kangheedo, yeonk, yongdaek, dhan.ee, sl.son, claude}@kaist.ac.kr {cy}@s2wlab.com Abstract—The Dark Web is notorious for being a major known as one of the major drug trading sites [13], [22], and distribution channel of harmful content as well as unlawful goods. WannaCry malware, one of the most notorious ransomware, Perpetrators have also used cryptocurrencies to conduct illicit has actively used the Dark Web to operate C&C servers [50]. financial transactions while hiding their identities. The limited Cryptocurrency also presents a similar situation. Apart from coverage and outdated data of the Dark Web in previous studies a centralized server, cryptocurrencies (e.g., Bitcoin [58] and motivated us to conduct an in-depth investigative study to under- Ethereum [72]) enable people to conduct peer-to-peer trades stand how perpetrators abuse cryptocurrencies in the Dark Web. We designed and implemented MFScope, a new framework which without central authorities, and thus it is hard to identify collects Dark Web data, extracts cryptocurrency information, and trading peers. analyzes their usage characteristics on the Dark Web. Specifically, Similar to the case of the Dark Web, cryptocurrencies MFScope collected more than 27 million dark webpages and also provide benefits to our society in that they can redesign extracted around 10 million unique cryptocurrency addresses for Bitcoin, Ethereum, and Monero. It then classified their usages to financial trading mechanisms and thus motivate new business identify trades of illicit goods and traced cryptocurrency money models, but are also adopted in financial crimes (e.g., money flows, to reveal black money operations on the Dark Web.
    [Show full text]
  • Binance Is Blitzscaling
    MULTICOIN CAPITAL BINANCE IS BLITZSCALING By Spencer Applebaum, Tushar Jain, & Kyle Samani Multicoin Capital is a thesis-driven cryptofund that invests in tokens reshaping entire sectors of the global economy. We rigorously research blockchain protocols, teams, and market opportunities to deliver venture capital economics with public market liquidity. 0 Table of Contents 1. Introduction 2. Binance’s Execution a. Dominance in Core Spot Trading b. Rapid Product Expansion c. The Power of Cross-Selling d. Putting Traders First 3. The Emergence of the Challenger Exchange (Token) a. Binance’s Willingness to Copy Competitors b. Competitive Landscape 4. The Equation of Exchange Tokens a. BNB’s Eciency of Token Value Capture b. Why Value Created by Exchange Is More Important Than Eciency of Token Value Capture 5. Conclusion Disclosure Multicoin has established, maintains and enforces written policies and procedures reasonably designed to identify and eectively manage conflicts of interest related to its investment activities. Multicoin Capital owns BNB tokens. Multicoin Capital abides by a “No Trade Policy” for the assets listed in this report for 3 days (“No Trade Period”) following its public release. 1 Introduction Binance’s native token, Binance Coin (“BNB”), was created in July 2017 through an ICO by Binance, which has since become the largest spot exchange in the world. Multicoin initiated a long position in BNB in Q4 2018. We published our original B NB investment thesis in February, 2019. The price of BNB at the time of publication was $10.06. We then j oined Laura Shin on the Unchained podcast in March, 2019 to expand on the thesis and discuss the achievements of Binance and and the intrinsic value of Binance Chain.
    [Show full text]
  • 3Rd Global Cryptoasset Benchmarking Study
    3RD GLOBAL CRYPTOASSET BENCHMARKING STUDY Apolline Blandin, Dr. Gina Pieters, Yue Wu, Thomas Eisermann, Anton Dek, Sean Taylor, Damaris Njoki September 2020 supported by Disclaimer: Data for this report has been gathered primarily from online surveys. While every reasonable effort has been made to verify the accuracy of the data collected, the research team cannot exclude potential errors and omissions. This report should not be considered to provide legal or investment advice. Opinions expressed in this report reflect those of the authors and not necessarily those of their respective institutions. TABLE OF CONTENTS FOREWORDS ..................................................................................................................................................4 RESEARCH TEAM ..........................................................................................................................................6 ACKNOWLEDGEMENTS ............................................................................................................................7 EXECUTIVE SUMMARY ........................................................................................................................... 11 METHODOLOGY ........................................................................................................................................ 14 SECTION 1: INDUSTRY GROWTH INDICATORS .........................................................................17 Employment figures ..............................................................................................................................................................................................................17
    [Show full text]
  • Trading and Arbitrage in Cryptocurrency Markets
    Trading and Arbitrage in Cryptocurrency Markets Igor Makarov1 and Antoinette Schoar∗2 1London School of Economics 2MIT Sloan, NBER, CEPR December 15, 2018 ABSTRACT We study the efficiency, price formation and segmentation of cryptocurrency markets. We document large, recurrent arbitrage opportunities in cryptocurrency prices relative to fiat currencies across exchanges, which often persist for weeks. Price deviations are much larger across than within countries, and smaller between cryptocurrencies. Price deviations across countries co-move and open up in times of large appreciations of the Bitcoin. Countries that on average have a higher premium over the US Bitcoin price also see a bigger widening of arbitrage deviations in times of large appreciations of the Bitcoin. Finally, we decompose signed volume on each exchange into a common and an idiosyncratic component. We show that the common component explains up to 85% of Bitcoin returns and that the idiosyncratic components play an important role in explaining the size of the arbitrage spreads between exchanges. ∗Igor Makarov: Houghton Street, London WC2A 2AE, UK. Email: [email protected]. An- toinette Schoar: 62-638, 100 Main Street, Cambridge MA 02138, USA. Email: [email protected]. We thank Yupeng Wang and Yuting Wang for outstanding research assistance. We thank seminar participants at the Brevan Howard Center at Imperial College, EPFL Lausanne, European Sum- mer Symposium in Financial Markets 2018 Gerzensee, HSE Moscow, LSE, and Nova Lisbon, as well as Anastassia Fedyk, Adam Guren, Simon Gervais, Dong Lou, Peter Kondor, Gita Rao, Norman Sch¨urhoff,and Adrien Verdelhan for helpful comments. Andreas Caravella, Robert Edstr¨omand Am- bre Soubiran provided us with very useful information about the data.
    [Show full text]
  • Trading and Arbitrage in Cryptocurrency Markets
    Trading and Arbitrage in Cryptocurrency Markets Igor Makarov1 and Antoinette Schoar∗2 1London School of Economics 2MIT Sloan, NBER, CEPR July 7, 2018 ABSTRACT We study the efficiency and price formation of cryptocurrency markets. First, we doc- ument large, recurrent arbitrage opportunities in cryptocurrency prices relative to fiat currencies across exchanges that often persist for weeks. The total size of arbitrage prof- its just from December 2017 to February 2018 is above $1 billion. Second, arbitrage opportunities are much larger across than within regions, but smaller when trading one cryptocurrency against another, highlighting the importance of cross-border cap- ital controls. Finally, we decompose signed volume on each exchange into a common component and an idiosyncratic, exchange-specific one. We show that the common component explains up to 85% of bitcoin returns and that the idiosyncratic compo- nents play an important role in explaining the size of the arbitrage spreads between exchanges. ∗Igor Makarov: Houghton Street, London WC2A 2AE, UK. Email: [email protected]. An- toinette Schoar: 62-638, 100 Main Street, Cambridge MA 02138, USA. Email: [email protected]. We thank Yupeng Wang for outstanding research assistance. We thank seminar participants at the Bre- van Howard Center at Imperial College, EPFL Lausanne, HSE Moscow, LSE, and Nova Lisbon, as well as Simon Gervais, Dong Lou, Peter Kondor, Norman Sch¨urhoff,and Adrien Verdelhan for helpful comments. Andreas Caravella, Robert Edstr¨omand Ambre Soubiran provided us with very useful information about the data. The data for this study was obtained from Kaiko Digital Assets. 1 Cryptocurrencies have had a meteoric rise over the past few years.
    [Show full text]