- The crypto exchange Binance is planning the acquisition of CoinMarketCap. The price for the acquisition is estimated at 400 million dollars.
- The deal is criticized for its potential to increase centralization in the crypto market.
According to a recent report, the crypto exchange Binance is close to completing the takeover of the data platform CoinMarketCap. The value of the takeover is estimated at around 400 million dollars, which could make the deal one of the most expensive in the crypto sector. Although no further details of the deal or the terms of the acquisition are known, it is expected to be announced later this week. If successful, the acquisition would follow the acquisitions of DappReview and WazirX by Binance.
CoinMarketCap is one of the most relevant data sources in the cryptomarket. The website is visited by almost 40 million users per month and has an 80% higher traffic than Binance. Despite its popularity, CoinMarketCap has also been the subject of criticism in the past. Therefore, in November 2019 the platform introduced a new indicator to reduce the manipulation of metrics by exchanges (fake volumes) and to measure the liquidity of more than 300 crypto currencies more accurately.
Will the deal threaten the decentralization of the market?
The announcement immediately triggered criticism by the crypto-community. According to some members of the crypto community, the merger could combine one of the largest exchanges with one of the most relevant data aggregators, which could affect the entire market. Matrixport’s sales director, Eugene Ng, said:
Who would trust CoinMarketCap after that, it doesn’t make sense. A Binance participation could probably work better than a acquisition, it just misses the purpose of having a balanced and neutral index aggregator.
On the other hand, Jeroen Hesp, the Business Development Manager of Citizen, joined Ng. He said that the deal will not be good for the crypto market. In addition, Hesp said:
Coinmarketcap is an independent website for listings. Binance could distort data and advertising on the platform towards their own tokens and IEOs.
Other users felt it would be more appropriate to wait and see how Binance deals with the purchase of CoinMarketCap, although the general consensus seems to be that the data platform will no longer be unbiased when it comes to showing the performance of the major cryptocurrencies.