Consolidation ramps up among crypto firms

The crypto industry has seen increased consolidation in the past week as companies refine their strategies in anticipation of the growing adoption of blockchain-based solutions. 

Asset manager Bitwise, for instance, has stepped into the European market with the acquisition of ETC Group. Meanwhile, crypto miner Bitfarms has announced a $125 million deal to purchase Stronghold Digital Mining at a considerable premium. 

Deals have also been taking place among crypto startups, particularly those working at the intersection of blockchain and artificial intelligence. PIP Labs, for example, announced an $80 million funding round on Aug. 21 for the tokenization of intellectual property, bringing the startup’s valuation to $2.25 billion, according to Bloomberg. 

Despite the significant figures surrounding blockchain-AI startups, venture firms are reportedly slowing down their investments in AI companies, citing a lack of clear revenue models and issues on the demand side. “Investor fervor for AI has been intense, and we don’t fully buy into the hype since demand, as shown by revenue, for applications writ large appears to have lagged,” Dragonfly partner Anirudh Pai told Cointelegraph. However, investors are still optimistic about layer-2 solutions, especially Ethereum rollups.

This week’s Crypto Biz examines recent acquisitions in the crypto industry, Tether’s plans for a dirham stablecoin in the United Arab Emirates, and Polychain’s investment in the Bitcoin protocol Corn.

Bitwise enters European market with acquisition of ETC Group

Bitfarms acquires Stronghold Digital Mining in $125 million deal

Crypto miner Bitfarms has acquired Stronghold Digital Mining in a $125 million deal, according to an Aug. 21 announcement. The acquisition includes $50 million in assumed debt and could add up to 307 megawatts of power capacity to Bitfarms’ operations, potentially expanding its energy portfolio to over 950 megawatts by 2025. Stronghold shareholders will receive 2.52 Bitfarms shares for each Stronghold share. That is a 71% premium to the Stronghold 90-day volume-weighted average price on Nasdaq as of Aug. 16. The deal seeks to diversify Bitfarms’ operations beyond Bitcoin (BTC) mining through high-performance computing capabilities, said the company.

Tether plans to launch dirham stablecoin with UAE partners

Tether has partnered with a consortium in the UAE to launch a stablecoin pegged to the UAE dirham. The new stablecoin will be “fully backed by liquid UAE-based reserves,” according to an announcement. The consortium includes two UAE-based companies Phoenix Group — a multibillion-dollar tech conglomerate based in Abu Dhabi — and Green Acorn Investments. According to Tether, cryptocurrency use in the UAE has grown exponentially since 2022, “driven by the establishment of the Virtual Asset Regulatory Authority” in the country.

Polychain leads $6.7 million investment in new Bitcoin-centric yield network Corn

Polychain Capital has invested $5.4 million in the Bitcoin platform Corn Network. The funding will support Corn Network’s development of decentralized finance applications on the Bitcoin blockchain, focusing on smart contracts, lending and decentralized exchanges. Also investing in the new yield-generating protocol were Binance Labs, Framework Ventures, HTX Ventures and Relayer Capital. Corn promises to align users, apps and tokenholders within a unified ecosystem backed by a tokenized version of Bitcoin dubbed BTCN. The protocol plans to generate revenue from its native token emissions, along with fees paid for transactions.

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