Last week, the Wall Street Journal reported that a “syndicate of investors” was in the closing stages of a $125 million deal to purchase CoinDesk. Founded in 2013 and sold to DCG in 2016, CoinDesk has been an important voice in the crypto world as an online publication and for its Consensus events.
Zenger News interviewed visionary investor Tim Draper, who expressed an optimistic outlook on the expected sale.
“Matthew Roszak of Tally Capital and Peter Vessenes of Capital6 got a sweet deal. Coindesk is a gem and will continue to be more important as the world economy moves to Bitcoin,” Draper said.
Crypto conglomerate DCG has good reason to want the sale – they are trying to pull their Genesis business unit from bankruptcy – a reverberation of the FTX collapse.
The lending unit of Genesis owed creditors $3.4 billion when it filed for bankruptcy protection in January 2023. The company’s largest creditor, Gemini Exchange, is suing DCG after failing to reach a deal in bankruptcy restructuring.
So, it’s easy to see why this is a good move for DCG – but what is the vision of the investors buying crypto’s lead publication?
Why Buy CoinDesk In A Crypto Winter?
For those looking at the situation from outside the space, it may seem questionable to buy a troubled media property that covers a flagging industry. However, as they commonly say, “a bear market is the time to build.”
Draper is eternally optimistic in his point of view on the Bitcoin adoption rate, and however long it takes, he is directionally correct. Sooner or later – probably sooner – the world will demand a cheaper, faster, better way of transacting with decentralized digital currency.
This purchase may be a look into the future. The bear market has been ongoing for over 18 months already, and it simply can’t go on forever. Once a regulatory structure is clarified, “real” institutional money may begin to move into the crypto world to warm our winter considerably.
In the next crypto bull market, owning one of the Web3 world’s biggest native mouthpieces may be advantageous. CoinDesk as a publication is important because it is crypto-first and native to the blockchain space.
Although it may be too early to know, this move may be a way to prepare for having a dominant voice in market coverage going into the next bull run.
We asked David Smooke, HackerNoon Creator & CEO, for his take on the impact this move would have on the relatively small crypto media landscape and he responded:
“CoinDesk has changed ownership before, and it continued to grow tremendously afterward. Given their revenue and DCG’s reported urgency to liquidate, this purchase price could age very well for the new owners. In my experience creating and sustaining HackerNoon, year after year, I’ve seen reader demand move away from mainstream publishers and towards niche expertise publishers,” Smooke said.
Can this purchase be considered an indicator regarding the odds of a recovery by the crypto market in the not-too-distant future? That will remain to be seen, based on when the market will recover and whether a new publication will take CoinDesk’s role as a major voice in the space.
CoinDesk’s current management is slated to stay on and DCG will stay involved in media, events, and data lines of business. Insiders expect the deal to be finalized in the coming weeks.
According to Axios, CoinDesk began exploring a possible sale in January.
Produced in association with Benzinga
