Blockfolio is off the table, and with it goes the second — and arguably final — opportunity for a crypto exchange to add millions of existing retail users to its ecosystem.
Following Binance’s acquisition of CoinMarketCap (CMC) earlier this year, crypto industry prognosticators identified the retail market’s most popular portfolio management app as the likely target of the sector’s next mammoth retail deal.
And FTX, which only launched in 2019, has proved willing to pay the $150 million price tag for Blockfolio’s 6 million-strong user base as the exchange looks to fuel its rapid growth.
“We’re at the beginning of a bull market that will bring more new users to the space,” Ed Moncada, co-founder and CEO of Blockfolio, told Cointelegraph.
“Pretty much everybody picked up the phone after that deal,” he continued. “But when it comes to the alignment of our missions, which are both very focused on the best experience for the user, there is no exchange moving as quickly or as thoughtfully as the team at FTX.”
Alluding to a “new trading experience” currently under development, Sam Bankman-Fried, co-founder and CEO of FTX, explained that “From the beginning, our goal at FTX has been to build the best quality trading experiences with the deepest liquidity for the widest possible cross section of traders. Blockfolio has built trusted relationships with millions within the crypto community, and we’re thrilled to be able to work with them to develop new and interesting experiences for that audience.”
FTX has risen to prominence partly thanks to its rapid introduction and iteration of trading products such as derivatives, options, and leveraged tokens, including retail-friendly futures contracts such as TRUMP and BIDEN, which currently indicate that crypto-holders strongly anticipate a Democratic victory in the upcoming U.S. election.
The Spartan Group, a blockchain consulting firm, advised Blockfolio on the deal.
Blockfolio was originally launched in 2014 as a pure portfolio-tracking app, and it has evolved into the industry’s de facto resource for digital asset price updates and project updates on-the-go. The app, which has always been offered at no charge, now supports over 10,000 crypto assets and more than 500 exchanges.
During the 2017 ICO boom, extreme volatility and demand led to an in-joke among traders that one could estimate the increase in the price of Bitcoin or Ethereum-based tokens simply by counting the seconds it took Blockfolio to refresh its price feed.
Moncada explained that Blockfolio would continue as an independent app with a commitment to respecting users’ data privacy and anonymity: earning and retaining the trust of the app’s users is a value he says has been at the forefront of his mind since the app was launched.
And following criticism of CoinMarketCap’s exchange ranking algorithm changes, which gave some observers in the crypto industry the impression that the new parent company had meddled with the numbers, Moncada promised that “there won’t be any in-app favoritism — you’ll still be able to import data from whatever exchanges you prefer to use.”
“This industry has a once in a generation chance to remake the financial landscape and the wider world,” said Moncada. “Doing that well means more than having great product skills and excellent operators — it means having the right values to build with integrity to the real needs and desires of users.”
Moncada added that the existing Blockfolio team will continue to build and develop the app moving forward.
While the value of the Binance-CMC deal has never been publicly disclosed, Binance insiders have dismissed the widely-reported figure of $400m as inaccurate and massively-inflated.
But other major acquisitions in the industry have disclosed the sums involved. The largest deals have mostly focused on exchanges as targets — including Circle’s ill-fated $400 million buyout of Poloniex and Bk Global Consortium’s $354 million purchase of a majority stakeholding in South Korea’s Bithumb exchange.
Industry analysts described the Binance-CMC deal as an attempt to “buy the top of the funnel”, marketing terminology for acquiring a user-base with the intention of monetizing the users. And while Blockfolio may not have as many unique users as CoinMarketCap, the level of user engagement with the Blockfolio app is demonstrably higher than CMC’s total page views, with over 150 million impressions per month.
Details of the upcoming “trading experience” that FTX and Blockfolio are developing together are sketchy. But the Blockfolio team indicates that given the size of its user base in the United States, the product will almost certainly be available to American traders, who often find themselves excluded from innovative trading products as a result of murky regulatory waters.
FTX has a regulated U.S. entity in the form of recently-launched FTX.us — and the former head of crypto at Robinhood, Sina Nader, has recently joined as Chief Operating Officer.