Talos Acquires Coin Metrics for Over $100 Million to Expand Data Solutions

In a significant move within the crypto industry, New York-based Talos, a developer of digital asset trading infrastructure, has acquired the blockchain data provider Coin Metrics for over $100 million. This acquisition marks a notable development in the ongoing consolidation within the crypto space, which has seen several high-profile deals in recent years.

Talos, co-founded by Anton Katz and Ethan Feldman, both veterans from Wall Street, has been at the forefront of providing trading infrastructure for institutional players in the digital asset market. The company's software facilitates the trading of assets like Bitcoin and Ethereum for hedge funds and asset managers. Talos' journey began with a vision to make digital assets an institutional asset class, a goal that has attracted substantial venture investment, including a $40 million round in 2021 led by Andreessen Horowitz and a $105 million round in 2022 that valued Talos at $1.25 billion. Other notable investors include PayPal, Fidelity, Citi, and BNY.

The acquisition of Coin Metrics is strategic for Talos, as it aims to become a one-stop shop for institutional players looking to enter digital asset trading and portfolio management. Coin Metrics, known for its leadership in supplying both on and off-chain data, will enhance Talos' capabilities in providing comprehensive data solutions. Katz highlighted that while Talos can capture pricing data from its liquidity providers, Coin Metrics offers more extensive historical and on-chain data, as well as superior client servicing capabilities.

Discussions between Talos and Coin Metrics began approximately four months ago, with Talos planning to fully integrate Coin Metrics into its team and platform. Katz emphasized that Talos did not raise additional capital to finance the acquisition, indicating a strong financial position. The acquisition comes at a time when the regulatory environment for crypto is thawing, with major institutions increasingly showing interest in the space. Katz noted that Talos is in conversations with virtually all large financial institutions, underscoring the growing acceptance of digital assets within traditional finance.

Looking ahead, Katz believes that the future of digital assets extends beyond popular cryptocurrencies to include tokenized versions of traditional assets. This includes public equities, private company shares, and private credit funds, all of which can be issued with a blockchain wrapper to facilitate trading, settlement, and ownership. Talos' bet is that digital assets will become the underlying technology of financial markets, driving the next evolution in finance.

While acquisitions often precede initial public offerings, Katz remains cautious about making strong commitments. However, he acknowledged that an IPO is one of the considerations for Talos, given its strong market position. The acquisition of Coin Metrics is a strategic move that positions Talos as a leader in the digital asset infrastructure space, poised to capitalize on the growing institutional interest in crypto.