Some Go Bankrupt, Others Go on a Buying Spree: MoonPay, Circle, and Kraken's Counter-Cyclical Acquisition Logic

Written by: David Christopher

Compiled by: Saoirse, Foresight News

This month, three cryptocurrency companies filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code, and two exchanges announced they would cease operations. During the same period when the industry faced successive shocks, MoonPay, Circle, and Kraken all announced or completed transactions, doubling down on infrastructure supporting their core businesses.

There is a general rule in mature technology industries: infrastructure gradually becomes homogeneous and commoditized, and capital turns towards business consolidation. The crypto industry follows this trend, but with an added variable: the industry landscape remains undecided. No one can determine which platform the public will ultimately use primarily for trading, which public chain will carry the most value settlement, or which USD stablecoin will become the market standard.

This has completely changed the underlying purpose of acquisitions by crypto companies. Consolidation in mature markets is to increase profit margins; while consolidation in the crypto industry is to ensure companies can survive normally regardless of which trading channels, underlying public chains, or mainstream stablecoins ultimately prevail. The difference in acquisition logic among the three companies essentially lies in their varying degrees of dependence on these three major industry endgame questions.

MoonPay: No Need to Bet on Sector Winners

MoonPay stands at the gateway for capital interoperability between the traditional financial system and the on-chain economy. Most crypto applications require tools to complete two-way conversion between bank balances and on-chain assets, while MoonPay's business model is not bound to any public chain nor relies on any specific stablecoin dominating the market.

On July 16, MoonPay acquired Glide, marking its sixth acquisition this year, continuing its consistent development strategy. Glide enables various applications to receive fund deposits from most tokens, wallets, exchanges, and bank cards, automatically completing token conversion and cross-chain operations to deliver the assets users need. Prior to this, MoonPay had already filled capabilities such as private key management, trade execution, AI quantitative trading, and financial reconciliation through multiple rounds of acquisitions. Previously, MoonPay was only responsible for the first and last links of fiat currency entering and exiting the crypto world; now, regardless of which platform users trade on, MoonPay is involved in the entire process of fund transfer, trade settlement, account reconciliation, and withdrawal.

Polygon serves as a stark contrast. In January this year, Polygon spent over $250 million to acquire Coinme and Sequence, complementing its "open monetary system" with compliance licenses, wallets, and fiat on/off-ramp capabilities. The business modules deployed by the two companies are similar, but Polygon's profit maximization is built on a large amount of value settling on the Polygon public chain; MoonPay's profitability follows user flow and is not restricted by public chains.

Circle: Must Defend USDC's Mainstream Status

Circle's revenue highly depends on the single asset USDC, and the emergence of OUSD has put Circle directly facing profitability pressure.

The Open Standards Alliance includes over 140 companies such as Visa, Mastercard, Stripe, BlackRock, and Coinbase. The alliance rules allow partners to mint and redeem OUSD for free; after deducting a small management fee, partner institutions can retain the vast majority of interest generated by reserve assets. On the day the news broke, the stock price of Circle's parent company CRCL fell sharply by about 16%. Reserve interest is Circle's core source of income. Even if USDC issuance volume remains stable, if Circle has to give up more interest to exchanges and wallet providers in exchange for channels continuing to support USDC circulation, the company's profit margin will still be under pressure.

The patent acquisition announced by Circle recently is precisely to cope with this competition. Circle purchased nearly a thousand approved patents from IBM's blockchain patent portfolio, covering multiple fields such as banking, insurance, enterprise infrastructure, and secure cloud services. Circle stated that these patents will be used to empower USDC, the Circle Payment Network, the Arc platform, and intelligent financial tools, without disclosing more details.

If revenue sharing becomes the norm in the stablecoin industry and industry interest spreads generally narrow, the core basis for users choosing stablecoins will no longer be just interest income, but the supporting ecosystem: settlement links connecting banks and enterprise systems, financial management tools for enterprise fund management, and complete traceability capabilities that meet audit requirements. Compared to simply competing on interest, competition at the infrastructure level will possess more lasting competitiveness.

Kraken: Striving to Become a Comprehensive Mainstream Trading Terminal

Coinbase, Robinhood, and Kraken are racing to build all-in-one accounts, allowing users to trade all categories of assets within a single account: crypto spot, on-chain assets, stocks, derivatives, payment products, and tokenized securities. At the same time, the three are building their own on-chain trading ecosystems based on the Base public chain, Robinhood Chain, and Ink public chain respectively, aiming to connect on-chain and off-chain markets to achieve an integrated trading experience.

Kraken's parent company Payward recently finalized an acquisition agreement to secure Magic Labs' Wallet-as-a-Service business; the underlying infrastructure for embedded wallets in applications such as Polymarket is provided by Magic Labs. Currently, Kraken users can trade on-chain tokens without creating a separate wallet; the platform's tokenized stock product xStocks has cumulative trading volume exceeding $350 billion; Kraken also operates the Ethereum Layer 2 network Ink, but this public chain has not yet achieved large-scale adoption.

After acquiring Magic Labs, Kraken can deeply embed wallet functionality into its own products. Users do not need to repeatedly jump to third-party wallets when performing on-chain operations and can access on-chain markets within the original App. The Ethereum Layer 2 network Ink can also rely on this underlying infrastructure to more conveniently connect with Kraken's existing massive user channels.

Industry dynamics over the past few weeks have confirmed that exchanges building their own on-chain trading sectors remain full of variables. Robinhood Chain launched on July 1, and three weeks later its daily active users surpassed Base; early traffic mainly came from meme coin trading, and now its tokenized stock trading has also taken shape. Although Base remains stronger in terms of hard indicators such as liquidity and stablecoin inventory, Robinhood's rapid rise proves that traditional brokerages can rely on their own user channels to quickly build new on-chain trading positions.

The triggers for the bankruptcy and shutdown of several crypto companies this month vary, but all point to an industry landscape reshuffle. On the other side, large platforms are continuously acquiring various technical capabilities, strengthening current product competitiveness on one hand, and betting on multiple industry future possibilities on the other.

As the access threshold for underlying infrastructure continues to lower, the deciding factors in industry competition fall on product integration smoothness and ecosystem network scale. Although the crypto industry is maturing day by day, sufficient competitive space remains in various sectors.