Kraken has become the first crypto exchange to become an authorized futures and index products operator in Europe following a major deal worth more than $100 million deal.
The exact value of the deal has not been disclosed by the company but Kraken’s acquisition of Crypto Facilities is confirmed to be a nine-figure deal.
BREAKING: @krakenfx just announced the acquisition of London-based Crypto Facilities in a deal worth over $100 million.
— Pomp ? (@APompliano) February 4, 2019
The U.K. Financial Conduct Authority (FCA) signed off on the deal on Monday, finalizing the acquisition.
What Does it Mean For Kraken and the European Crypto Market?
With the deal, the existing user base of Kraken is now able to margin trade in real time outside of the trading hours of U.S.-based futures markets.
Kraken is the first exchange in the cryptocurrency sector to offer a fully regulated and FSA-approved margin trading platform to investors in Europe.
In an official announcement, Crypto Facilities CEO Timo Schlaefer said that since its inception in 2014, the firm has envisioned of developing the most powerful and sophisticated trading platform in the global market.
With Kraken, Schlaefer said that the Crypto Facilities team will work toward creating next-generation products to improve the infrastructure supporting cryptocurrencies as an asset class.
“It has been our mission to build the most sophisticated, powerful and user friendly cryptocurrency trading platform. Teaming up with Kraken allows us to innovate the next generation of products and tremendously boosts the value we are able to provide to our clients.”
Jesse Powell, the CEO of Kraken, expressed his optimism in introducing futures and index products to the exchange’s users.
Throughout 2019, Powell emphasized that the company has a wide range of products in store for both retail traders and institutional investors.
“We are excited to introduce eligible clients to these industry leading futures and index products. Over the coming months, our teams will continue to enhance and expand these offerings. We’ve got great stuff in store for traders and institutional clients in 2019.”
The remark of Powell on the outlook of the institutional industry of crypto comes after BlockTower Capital CIO Ari Paul said that institutions could enter the cryptocurrency sector by the third quarter of 2019.
I didn’t talk to many institutional investors in the second half of 2018. Just spent a day and a half at an allocator conference talking to many family offices and a few banks. Here are my takeaways.
— Ari Paul (@AriDavidPaul) February 1, 2019
The acquisition of Crypto Facilities by Kraken is officially the largest deal in 2019 to date. Previously, the exchange acquired three Bitcoin exchanges Coinsetter, Cavirtex, and Clever Coin, wallet platform Glidera, and market data provider Cryptowatch.
Subsequent to the deal, Crypto Facilities will continue to work with the CME Group, which operates a large Bitcoin futures market in the U.S., in providing data to the CME CF Bitcoin Reference Rate.
Timing of the Deal is Crucial
Throughout the past week, industry executives including Ledger CEO Eric Larchevêque and Cardano founder Charles Hoskinson said that they expect the bear market to extend throughout 2019.
“We think we could have 12-24 more months of a bear market. Or some kind of nuclear winter in crypto. So we are just adapting the growth of the company to make sure we can withstand two years of bear market,” Larchevêque said.
The nine-figure deal of Kraken comes in a period during which the sentiment around the cryptocurrency market has worsened in recent months.