Introduction
An emerging theme in the financial world has been that of the merging of decentralized finance (DeFi) and traditional finance (TradFi) companies. Although pinned against each other in the past, as DeFi came to market as an alternative, a workaround of sorts, to the centralized economy that had always been, recent acquisitions prove the embrace of DeFi by preexisting traditional companies looking to move into the inevitable growing space, filled with new technology and users.
Cryptocurrency Interest
One of the most recent and most eye-catching of these acquisitions was that of Bridge by Stripe, which a report pinpointed the acquisition at $1.1 billion, a premium on the $200 million valuation of Bridge, derived from a recent round of funding (C). Bridge is a payment platform centered around stablecoins, or cryptocurrencies that are intended to remain at a stable price due to them being tied to various assets, like fiat currencies or gold (Coinbase). Bridge was acquired in October by Stripe, a global payment service provider for businesses that has been considered as one of the most valuable private technology startups. Stripe has an expansive reach, serving 195 countries and allowing transactions in more than 135 currencies (Stripe). Furthermore, Stripe’s growth is evident, with numbers continuing to climb, such as introduced in their 2023 annual report. One of the most impressive values was the volume of transactions, which totaled nearly 1% of global GDP. Transactions on the platform broke $1 trillion, up 25% from Stripe’s 2022 numbers (Corba).
A Similar History
Stripe has historically shown interest in entering the cryptocurrency space. One such initiative came in the form of a partnership with Coinbase. The partnership’s goal was centered around the goal “to increase onchain adoption and provide faster, cheaper financial infrastructure” (Pollak and Aggarwal). Stripe’s end of the deal involved adding USDC (a stablecoin pegged to the US Dollar) on Base to their cryptocurrency products, which also enabled easier conversion between fiat and cryptocurrencies (Pollak and Aggarwal). Coinbase reciprocated by adding Stripe’s fiat-to-crypto onramp to its (Coinbase’s) Wallet, allowing users to buy cryptocurrency directly, such as with Apple Pay or a credit card (Pollak and Aggarwal).
Implications of the Deal
By acquiring Bridge, Stripe allows itself to harness the original intention of cryptocurrencies: payments. Although a smaller company, with annual revenue ranging from $10 – $15 million, Bridge has been said to have proven itself as one of the best stablecoin infrastructure businesses. This deal opens Stripe up to the estimated $160 billion market represented by stablecoins, which has recently grown and now proves more legitimate with this sale (Sigalos).
Other Acquisitions
Stripe is not the only large financial technology company entering the cryptocurrency space, as Robinhood Markets, a trading platform giant, purchased the cryptocurrency exchange Bitstamp for $200 million in June of this year. Bitstamp was founded in 2011 and serves a global market with 85 tradable assets. Robinhood aims to compete with already established platforms in the cryptocurrency realm, such as Stripe’s partner, Coinbase. The deal allows Robinhood to look internationally, with Bitstamp holding a position in the European and Asian markets.
Lurisma’s Connection
What do these acquisitions in the DeFi space mean for Lucrisma? It shows that Lucrisma is uniquely positioned as a company that synthesizes the worlds of traditional and decentralized finance. While many companies have labeled themselves as existing in one of the two areas, and expand into the other as they grow, Lucrisma has viewed the convergence of the two as the way forward, since the very beginning. Allowing users to monitor accounts and assets in both traditional and decentralized markets, all with the security of their data in the blockchain, Lucrisma has been ahead of the curve. As time progresses, the blending of the two will progress, and it is likely Lucrisma and its concepts will be at the forefront.