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Crypto Exchange Kraken Secures Blockbuster $4 Billion Valuation After $100m Mega Deal

Last Updated March 4, 2021 2:53 PM
Joseph Young
Last Updated March 4, 2021 2:53 PM

Following the completion of the largest deal in the cryptocurrency sector year-to-date, major U.S. and Europe-based crypto exchange Kraken is set to raise a funding round valuing the company at $4 billion.

On February 4, as CCN.com reported, Kraken acquired Crypto Facilities for over $100 million, becoming a regulated futures and index products operator in Europe.

$4 Billion: Kraken is a Top Three Crypto Exchange

In an official statement, the Kraken team revealed that the company, which serves more than 4 million active users, will soon achieve a valuation of $4 billion.

The company is in the process of finalizing the deal which would place Kraken behind Coinbase to become a top three exchange alongside Binance.

Kraken said :

“Kraken launches futures trading via nine-figure deal, will soon close a fundraising round at $4B valuation, has 100 devs and growing, reveals consumer-friendly rebranding, and launches the first podcast to show juicy inner workings of a crypto company.”

The timing of the $100 million megadeal it closed with the approval of the U.K. Financial Services Agency (FSA) allowed the exchange to expand its range of products in Europe prior to closing a new funding round.

With the infrastructure implemented by Crypto Facilities, more than 100 developers, and the new capital, the company is expected to add more investment vehicles and products in the months to come.

“We are excited to introduce eligible clients to these industry leading futures and index products. Over the coming months, our teams will continue to enhance and expand these offerings. We’ve got great stuff in store for traders and institutional clients in 2019,” Kraken CEO Jesse Powell said.

Bitcoin’s Big Three: Kraken, Coinbase, and Binance

kraken bitcoin crypto
Source: Shutterstock

In October 2018, Coinbase secured $300 million from Tiger Global and achieved an $8 billion valuation.

Binance has completed several strategic funding rounds from companies like Temasek to target specific markets.

Four months ago, Binance reportedly received  an undisclosed amount in investment by Temasek to launch a fiat-to-crypto exchange in Singapore.

With millions of active users, an international market, and strategic investors on board, Kraken, Coinbase, and Binance have become the big three cryptocurrency exchanges in the global market.

Since their inception, all three Bitcoin exchanges have focused on security and investor protection over other areas.

Coinbase and Kraken have established industry standards for security since the early days of the cryptocurrency sector, and Binance has significantly improved the transparency and communication between exchanges and their users.

Similarly, the three deals, Tiger Global’s investment in Coinbase, Binance’s Temasek-led funding round, and Kraken’s $4 billion valuation, have all come during arguably the worst bear market in the sector’s 10-year history.

brian armstrong coinbase bitcoin crypto exchange
Coinbase CEO Brian Armstrong | Source: Steve Jennings/Getty Images for TechCrunch/Flickr

The confidence of investors in the long-term outlook of companies like Kraken show that as Pantera Capital CEO Dan Morehead said, fewer investors see Bitcoin and the wider cryptocurrency asset class as a fad.

Speaking to Laura Shin on Unconfirmed, Morehead explained:

“I would admit that in the previous one, I had more kind of a worry in the pit of my stomach on whether the blockchain is really going to work and there were some real regulatory risks that could have happened. This one, I think fundamentals are much stronger than they were in the 2014-15 crypto winter.”

The digital asset sector could take a long time to recover back to November 2017 numbers. But, despite the rapid decline in the prices of cryptocurrencies, it is crucial for companies to continue building and strengthening the infrastructure supporting the asset class.

The $100 million acquisition of Crypto Facilities and the $4 billion valuation of Kraken demonstrate that the Bitcoin industry is on the right track to improve the liquidity and the range of investment vehicles that are accessible to mainstream investors.

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