After spending a fortune on fortune on deals and investments in 2022, Binance may still have a mountain of dry powder left to deploy before the year closes.
The CEO of the world’s largest crypto exchange, Changpeng Zhao (CZ), recently said that his company may ultimately spend over $1 billion this year on acquisitions and investments.
Binance’s Billion-Dollar Plans
As detailed by Bloomberg, Binance has already committed $325 million across 63 projects in 2022. In 2021, it only spent $140 million across 73 projects for the entire year, amidst a far more bullish crypto market than today.
Yet the deals may not be over: Binance still has $200 million waiting on a possible Forbes deal, and $500 million in financing for Elon Musk’s Twitter buyout – which is now back on.
CZ told Bloomberg that Binance has thus far been focusing its money on the NFT and fan token ecosystem, decentralized finance, and traditional payment providers.
“DeFi works,” said the CEO. “NFTs are a lot more than selling pictures of monkeys. NFT use cases have not largely been well built – NFTs for tickets, for university degrees. I think the technology will stay.”
Binance currently has a $7 billion fund investing in deals, alongside an over 30 member team focused on mergers and acquisitions. Over the next few months, CZ said the company may acquire minority stakes in both gaming and traditional e-commerce companies.
One area of spending the company has been more frugal about, however, has been distressed crypto lending firms. Rival exchange CEO of FTX, Sam Bankman-Fried, grew notorious in June for stepping up with bailout and loan deals for multiple struggling organizations, such as Voyager Digital. The lender ultimately went bankrupt, and its assets have now been acquired in an auction by FTX for $1 billion.
Zhao said the company had a look into many distressed crypto lenders over recent months, but wasn’t impressed by their business models.
“Many of them, they just take a user’s money and give it to somebody else,” he explained. “There’s not a lot of intrinsic value. In that case, what’s to acquire? We want to see real products that people use.”
Amid a slew of bankruptcies and downsizings, Binance was one of few crypto companies to scale their hiring efforts during the bear market. Its CEO boasted in May that the company had stocked up a “healthy war chest” by resisting the urge to overspend during the bull market.
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