Crypto Exchanges as Competitive as Google, JPMorgan, the Fed - Report
Business is booming for crypto exchanges, per a new report, which claims that the industry is becoming as competitive as tech giants, major banks – and even the American central bank.
These were the findings of a paper from Coin Metrics, whose authors wrote,
“The crypto industry, and exchanges specifically, has gone from questions of basic product viability to questions of industry-wide competitive advantages against the likes of Google, JPMorgan and the Federal Reserve itself.”
The report’s authors claimed that “the evolution of the crypto industry to date has been remarkable by any measure,” and added that “from a standing start in October 2008, the cryptocurrency exchange industry has matured at an astonishing pace.”
However, crypto exchanges were warned not to rest on their laurels, with big businesses possibly weighing up bids that could see them swallow up independent crypto companies and exchange operators.
The authors included some cautionary words,
“There is no guarantee that this maturation is sufficient for cryptocurrency exchanges to remain independent indefinitely.”
The report also found that M&A deals within the industry are on the up – leading to the rise of industry heavyweights like Coinbase.
Coin Metrics believes that shrewd financial management has helped exchanges rise to reach “maturity” this year.
The authors explained,
“The most capable exchanges have leveraged their economic dominance to round out their organizations into mature businesses. The strong cash flow gave exchanges the ability to attract capable and expensive hires; comply with expensive regulations; (expand into new markets; and, critically, become the primary strategic acquirer in the industry.”
And, looking to the future, the authors believe that how exchanges respond to growing big-business interest will be key, concluding,
“Just as crypto businesses have had to align around crypto exchanges, crypto exchanges themselves may need to make similar adjustments when money center banks and big tech companies fully enter the industry.”
Big businesses all over the world are already making big crypto moves. Banks already can store and sell cryptocurrencies in Germany and the United States, while South Korean banks are planning to launch crypto services before the end of the year. Last week, Russian Expobank issued first crypto-collateral loan, while yesterday, major Ethereum (ETH) and enterprise blockchain software company ConsenSys received an investment and acquired blockchain Quorum from major investment bank JPMorgan.