Cryptocurrency exchanges are currently in a very good situation. The rally of several cryptocurrencies in the last few months including bitcoin and dogecoin have seen more people enter the market and thus, higher transaction volumes than ever before. Needless to say, crypto exchanges are very profitable at the moment.
One of the exchanges celebrating a win is crypto exchange Kraken which recently saw massive backing from RIT Capital Partners which is a British investment trust. The trust is managed by J. Rothschild Capital Management Limited and this was formally announced on April 21, 2020.
Kraken Gets Big Backing
Numis Securities hosted a webinar in late March 2021 and it was during this webinar that investors in RIT Capital Partners were informed of the stake that had been purchased in Kraken. This information comes via a note that was published by Numis Securities on April 12, 2021.
The note made reference to a secondary market purchase at a value that was considered ‘attractive’ by the trust. No official confirmation has been given by either Kraken or RIT Capital but there is speculation about the details of the Investment itself.
A report from Bloomberg earlier this year stated that Kraken was looking for funding at a valuation of $10 billion and it is not impossible that the trust bought a stake in Kraken for that reason. The trust is also known to have recently taken up an interest in fintech as in 2020, it participated in a $412 million fundraising round for Paxos, a crypto firm.
Other investments in fintech firms include £7.8 million and £7.6 million investments in NerdWallet and Brex as of last year. With these having taken place, the trust might have decided to take a leap forward and buy a stake in Kraken
This comes just after Coinbase announced a new partnership with WeWork that will see the latter accept cryptocurrency as a form of payment for it services and also make payments to third parties and landlords using cryptocurrency. Major investment firms also seem to be putting resources into acquiring cryptocurrency seeing how profitable the industry has become recently.
It was only a matter of time until cryptocurrency exchanges began getting huge Investments from established firms and Kraken from all indications will be the first of many to come.