Coinbase Rival FTX Raises $400M in First Fundraising Round
Cryptocurrency exchange FTX US has raised $400 million in its first external fundraising round, gaining a valuation of $8 billion. This round of funding has propelled the American FTX affiliate to the circle of the most valuable crypto firms in the US.
Some of the investors were Temasek, SoftBank’s Vision Fund 2, and the Ontario Teachers’ Pension Plan board.
FTX was founded in 2019 in Hong Kong. The company, valued at $25 billion, has since moved its headquarters to the Bahamas. Founder Sam Bankman-Fried established the US business in 2020. FTX US grew exponentially in 2021, with its average daily volume expanding sevenfold from 2020. Most of the growth was due to Bitcoin’s record high value in November 2021.
Users traded coins worth over $67 billion on the exchange in 2021. FTX US currently has about 1.2 million registered users. The FTX US team hopes that the new investments will help the company gain a competitive edge over other popular cryptocurrency exchanges such as Coinbase and investment apps like Robinhood.
FTX US is following the example of the wider company as it intends to push into the derivatives market and add them to its offer. With this goal in mind, FTX acquired LedgerX, a crypto futures and options exchange, in October 2021.
The latest fundraising round shows that investors are not giving up on the cryptocurrency market, even though the prices of the most popular coins have dived recently. Bitcoin and Ether have both roughly halved in price since November when both reached record highs. Some altcoins experienced an even steeper drop in the meantime. For some observers, these are clear indicators that a “crypto winter” is on its way. Still, the phenomenon is not crypto-specific, as stock markets also took a tumble.
“Volatility cuts both ways,” FTX US President Brett Harrison said. “With all of the large upturns that we’ve seen in crypto, we have to expect that there are going to be downturns as well. And we’re definitely in that period right now.” He also added, “I think that we are going to eventually see a bounce back.”
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