On July 9, DeFi Technologies (CBOE CA: DEFI) agreed to buy trading desk Stillman Digital in an all-stock deal that analysts say will transform the Canadian crypto platform into “a smaller version of Galaxy Digital.”
The buyout, which valued Stillman at approximately CA$4.22 million ($3.1 million) as of the close of trading July 8, “is a strategic step that not only expands our capabilities in the trading sector but also diversifies our client base and revenue streams,” DeFi Technologies CEO Olivier Roussy Newton said. The deal has been agreed to but not yet completed, according to the statement.
“The resulting DeFi platform, which would combine crypto asset management, execution trading, and proprietary trading, would be akin to a smaller version of Galaxy Digital, in our view, as it would include variations on Galaxy’s product offerings,” Mark Palmer, an equity research analyst at The Benchmark Company, told Cointelegraph in an email.
The pending acquisition reflects the need for crypto platforms to pursue scale “so they can use size and diversification to better navigate the industry’s significant momentum swings and the increasing competition in many of its sub-verticals,” Palmer said.
Through its investment management subsidiary Valor, DeFi Technologies operates one of the largest Solana (SOL) exchange-traded products (ETPs), Valor Solana, which trades in the European Union, along with an array of other altcoin ETPs.
According to Curtis Schlaufman, DeFi Technologies’ vice president of marketing and communications, the investment platform, which manages approximately $600 million in assets, is among a handful of asset managers permitted to incorporate staking into its publicly listed funds.
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Valor’s staking investment products encompass Bitcoin (BTC), Ether (ETH), and Internet Computer (ICP). Schlaufman said DeFi Technologies also operates several other altcoin ETPs and launched a new business line earlier this year focused on market-neutral crypto trading strategies.
Acquiring Stillman will “enhance [DeFi Technologies’] trading capabilities while also producing upside during bear markets,” in part due to Stillman’s lucrative crypto onramping business line, Schlaufman said.
According to the statement, Stillman has facilitated more than $15 billion in trading volume since its inception, around $4 billion of which occurred in the first quarter of 2024.
Mergers and acquisitions (M&A) in the crypto space have been on the rise in 2024, according to M&A advisory Architect Partners, driven largely by consolidation among brokerages, exchanges and other financial infrastructure providers.