At present, Binance’s attention is on the acquisition of CoinMarketCap (CMC).
There has been a notable controversy surrounding this, which has generated many questions, such as, how can they ensure the authenticity of data after the acquisition of CMC?
If Binance’s acquisition of CMC is simply regarded as “just to be the No.1”, no matter whether it is a competitor in the competition or the entire cryptocurrency industry, the vision of this company has become much narrower. In the ranking section of trading platforms such as CoinGecko, which has its own data model, Binance is also one of the top cryptocurrency exchanges.
Completing multiple large-scale acquisitions in a row, Binance has conveyed to the outside world an image of expanding at a hefty price and continuously breaking the boundaries of a crypto exchange. But like all other industries, large-scale acquisitions can always arouse heated debate.
In early April, when the keywords “Binance”, “400 million US dollars”, and “Acquisition of CMC” were linked together, the sensory impact on the cryptocurrency industry was severe enough, and it was evaluated as the “biggest public acquisition event in the cryptocurrency industry “.
From the Alexa rankings on May 25, CMC website visits were ranked 656th in the world, and there is not much change from before the acquisition. In the short term, the financial returns and value returns that CMC brings to Binance have not been highlighted.
However, He Yi, Binance`s CMO still regards CMC as “the most successful acquisition of Binance”. She believes that this acquisition is an ecological layout that has more advantages than disadvantages from the perspective of commercial competition strategy and tactics. Not only for the benefit of Binance, but also for the benefit of the industry. CMC’s influence in the Chinese-speaking region is not very prominent, but it is an important source of data in the European and American markets and even the regulatory authorities.
So what principles does Binance follow in its strategic layout? Is it based on the market for inter-industry competition or is it an oversight? “This is not a conflict.” He Yi says.
According to the distribution of CMC users counted by Alexa, users in the United States, India, Brazil, Japan, Canada and other countries are more accustomed to using CMC. Since its establishment 7 years ago, CMC has gradually formed its influence and authority. Previously, the Blockchain Transparency Institute (BTI) provided a research report to the US Securities and Exchange Commission (SEC), which used a large amount of CMC data.
The acquisition of CMC to obtain traffic and make Binance invincible in the competition is no longer a tactical purpose of Binance. She mentioned the two dimensions of business competition strategy and tactics more than once, “The strategic significance of Binance’s acquisition of CMC is more important.”
He Yi believes that whether it is the regular Internet business or the blockchain industry, the essence of most commercial competition is the traffic dispute. The acquisition of CMC by Binance will master the largest source of traffic in the blockchain industry and will continue to promote the opening of Binance and upgrade it to a business ecosystem that integrates traffic and transactions.
This statement releases a signal of “don’t think of Binance as a trading platform anymore”. Even for competitors in the industry, the sooner they realize this, the more advantageous it will be.
From the perspective of Binance’s acquisition and compliance actions in the past year, which started with crypto-asset trading, they tried to get rid of the narrow restrictions of the trading platform and began to play the role of a business ecosystem that promotes the bright side of the industry. In the long run, this point is more of a concern for competitors in the industry.
“Buying and not buying, the first thing involves reluctance, is it to make money for pleasure or to promote the industry? Binance chose the latter and is willing to invest the earned money into the industry again in terms of investment and mergers.” He Yi says. Binance`s long-term vision is to allow this industry to break through existing boundaries.
For Binance, whether it is acquiring CMC or DappReview, investing in Indonesian exchange Tokocrypto or Australian blockchain technology company TravelbyBit, it now seems to have left traces based on its strategic and tactical thinking.
From the perspective of mergers and acquisitions, the acquisitions of Jex, WazirX and the investment in Tokocrypto, undoubtedly complement Binance’s business and geographic segments in the trading field, such as the rapid development of derivatives trading systems and occupy overseas markets; while the acquisition of CMC and DappReview reveals Binance’s traffic, user profile and habitual intentions. This is the long-term significance of diversified business development.
In the Internet business, high-frequency acquisition investment is already the regular action. Facebook does not need to make a photo or video-sharing app, it only needs to use capital to buy an application (Instagram) to occupy this market. The same is true for Google’s investment in YouTube to occupy the video-sharing market. He Yi says, “Acquisition is to use money in exchange for a time window to make Binance run faster and faster.”