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Nexon Group, a video game development company, is set to acquire Korean exchange Bithumb for $457 million. This could end months of speculation about the future of the exchange placed on the market in 2020.
Nexon Set for Record Acquisition
According to local media, Nexon is positioning itself to purchase a 65% stake in Bithumb for around 500 billion Won ($457 million). Nexon has signed an agreement with Bithumb at the beginning of January but has not finalized the agreement. This record-breaking acquisition is believed to be the work of Nexon CEO Kim Jeong-Joo. The latter will work with Vidente, one of Bithumb’s main shareholders, to buy the company and control it.
If the acquisition goes as expected, it would be the largest to date in the cryptocurrency sector. Binance currently holds the record after buying CoinMarketCap in 2020 for a fee believed to be around $400 million. This is not the first time Nexon has invested heavily in cryptocurrency and FinTech companies. The gaming firm also has two other platforms, Luxembourg exchange Bitstamp and Korean exchange Korbit.
The acquisition of Bithumb would take Nexon into the big leagues within the cryptocurrency industry. It is widely speculated that Nexon could integrate the use of cryptocurrencies in future video games.
A buyout that will save Bithumb?
To date, Bithumb is the exchange with the highest volume of transactions in South Korea. Bithumb covers more than 50% of the crypto volume in the Asian nation and has nearly 5 million users.
However, Bithumb was charged with fraud last September by South Korean authorities with a raid conducted in its offices. This culminated with its president Lee Jung Hoon getting arrested on allegations of insider trading. These allegations caused major controversy for the exchange, and its company has been looking for a new buyer. With its diverse ecosystem and experience, Nexon would be able to reboot the exchange in the right direction.
Besides, this acquisition is timely for Nexon. Recently, Binance shut down its South Korean branch due to a lack of liquidity. Competition remains fierce in South Korea, but Binance pullout allows local platforms to thrive without a renowned international competitor’s threat.