Deutsche Börse Just Bought a Kraken Stake (Apparently $200M Buys More Credibility Than 10 Years of BTC HODLing)

Deutsche Börse AG has decided to snag a 1.5% fully diluted stake in Payward Inc., which is apparently the corporate umbrella hiding Kraken's legendary deposit delays. The whole thing is set to close sometime in Q2—assuming regulators don't suddenly develop a conscience—and values Kraken at roughly $13.3 billion. Yes, that's a solid discount from the heady $20 billion they were waving around during their November fundraising roadshow, per some quick Bloomberg arithmetic that probably made some VC funds sweat a little.

"We're seeing a clear wave of consolidation and partnerships as traditional financial institutions move to catch up with crypto, particularly around tokenized assets," Ruchir Gupta, co-founder of Gyld Finance, told Decrypt. "It's hard for them to build out these businesses from scratch; therefore, they are investing in incumbents to gain an edge." Which, fair enough—at this point, "building from scratch" would be like showing up to a potluck empty-handed when everyone's already seen your DeFi yield farming disaster pics.

Deutsche Börse's move comes hot on the heels of Intercontinental Exchange (parent of the NYSE) dropping roughly $200 million on OKX earlier this year. "Large traditional players are under pressure to keep up with the momentum and regulatory clarity, and buying out stakes—especially in companies that are still private—is one of the easiest ways to do that," Gupta added. Because apparently, when you're a $200 billion institution worried about missing the tokenization train, the easiest solution is just... writing a really big check. Shocking, we know.

The investment builds on a partnership the two firms announced in December, spanning FX liquidity, custody, settlement, collateral management, and tokenized assets. Kraken integrated directly with 360T, one of the world's largest FX trading venues, giving clients access to bank-grade FX liquidity. In February, the partnership hit its first milestone with xStocks launching on 360X, Deutsche Börse's regulated trading venue, enabling trading of blockchain-based tokens representing real equities and ETFs. Basically, it's like giving your turbocharged DeFi degens access to the same boring traditional finance infrastructure that banks have used for decades to move money around—except now it's on-chain, which apparently makes it exciting.

Last November, Kraken confidentially filed for an IPO after raising $800 million at a $20 billion valuation, but the listing has since been put on hold. Meanwhile, KRAKacquisition Corp., a SPAC sponsored by a Kraken affiliate, completed a $345 million public offering in January and is hunting for an acquisition target valued as high as $10 billion. For those keeping score at home: Kraken wants to go public, but