Voyager’s collapse earlier this year was yet another high-profile collapse of a crypto firm. Now, the companies that have survived are preparing to acquire Voyager’s assets for pennies on the dollar. Coinbase has already explained that they are no longer interested in the acquisition – could FTX or Binance save the day?
Could FTX or Binance buy Voyager?
FTX and Binance are both looking into buying Voyager’s assets after the decline of the company earlier this year.
They are not the only ones: in a presentation given earlier this month, Voyagers’ lawyers explained that there were already 22 investors that had completed the required due diligence forms to be able to partake in the proceedings, but most of the other companies are not known.
Are SBF and CZ buying up the entire market?
Both SBF and CZ have commented that they believe that they have a duty to help firms that are struggling in the space. CZ has said that he believes anyone who is still solvent has a moral imperative to try and now help those who are struggling.
Fortunately, there are many benefits to having a positive cash flow with cash reserves whilst everyone else is insolvent.
Some of Warren Buffett’s most successful decisions throughout his career were decisions he made to hedge risk before large financial meltdowns. In 2008, when most of Wall Street had been completely bankrupted, he was one of the few who remain strong, and his firm Berkshire Hathaway benefited hugely from the opportunity that presented itself.
In the case of Binance, CZ has said that he believes the current market conditions caught a lot of people unprepared. Many people weren’t prepared for 80% drawdowns in the market and the markets were full of exuberance.
Moreover, this had presented a problem for firms that were seeking to “build and build”. In a recent interview with Bankless, CZ explained how the hubris at the peak of the markets had become untenable: Solidity developers were being offered $500k jobs even without a great deal of experience.
Nowadays, although salaries for developers are still extremely high, they are not nearly as high as they were during the peak of the market, which means that companies like Binance have the opportunity to secure much better talent at a much fairer cost.
When Coinbase announced in June that they were laying off 18% of their workforce, a lot of people blamed the exchange for growing too quickly. At the same time, Binance (who seemed a lot more prepared) announced that they were beginning a hiring spree.
Celsius approaches Binance too
CZ has stated that Voyager isn’t the only bankrupt firm that has sought the help of Binance during this debacle, and that Celsius had also contacted them to try and sell their assets.
Since Celsius entered into their chapter 11 bankruptcy proceedings they have been exploring a variety of different solutions for restructuring their assets and reimbursing their community members.
One of the approaches, proposed by Simon Dixon, is one in which the debt restructuring is geared towards protecting the community first, rather than reimbursing Celsius’ creditors. However, this proposal appears unlikely to succeed.
Coinbase steps away from the Voyager deal
Although initially interested, Coinbase has announced that they are stepping away from the Voyager deal.
Coinbase’s initial involvement in the process was via a potential partnership with Callaway Capital Management, but in the end they decided not to continue with the acquisition after concluding that “the financials don’t add up”.
This is a common problem for companies that have gone bankrupt, and is a similar reason as to why Binance passed on acquiring Celsius and FTX found itself embroiled in complications after trying to bail out BlockFi.
VGX price leaps over 100%
The news that FTX and Binance may be bailing out Voyager has been hugely positive for Voyager’s VGX token, which has gained over 100% in the last 24 hours.
Acquisitions are usually positive for the companies that are being acquired, as their new management is better capitalised and they become a part of a much larger organisation.
VGX price is still down over 95% from its all time highs, but this isn’t so bad when one considers that most alt coins are down at least 80% from their ATHs, and many have fallen over 95% even without suffering large hacks and losing all their funds.
Undoubtedly, for those who are well-capitalised, a bear market is a golden opportunity to be seized with both hands. As the famous Charlie Munger quote goes: “When the tide goes out you can see who has been swimming naked” – a great opportunity for those who wish to capitalise on “discounted” offerings.
It remains to be seen whether FTX or Binance will go through with the proceedings of buying Voyager. It may well be the case (as it often is) that Voyager’s financial situation is worse than was originally imagined, in which case it may not seem like such an attractive proposition after all.
- Celsius receives approval to sell BTC mined to meet operational expenses
- Sam Bankman-Fried Crypto Firms and Voyager more Deeply Enmeshed Than Realised
Tamadoge - The Play to Earn Dogecoin
- '10x - 50x Potential' - CNBC Report
- Deflationary, Low Supply - 2 Billion
- Listed on Bybit, OKX, Bitmart, LBank, MEXC, Uniswap
- Move to Earn, Metaverse Integration on Roadmap
- NFT Doge Pets - Potential for Mass Adoption