Kraken Weighs Aave Acquisition: Insider Talks of a $385M Play for 15% Stake

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Today’s top stories:

• Leading cryptocurrencies are in the red, falling 1-5%, SOL takes the lead; BTC sits at $59.5k
• Strategy’s STRC plunges to a new low of $73; MSTR drops to $84
• Following ETH’s drop, Tether’s USDT overtakes ETH in FDV, becoming the second-largest token
• Kraken aims for a 15% share in Aave based on a $385M valuation
• Story Protocol transitions into a data network and shifts focus to AI Training

🏦 Kraken Sets Sights on a 15% Share in Aave Valued at $385 Million

Kraken is currently negotiating to purchase a 15% stake in Aave at a $385 million valuation.

In exchange for 250,000 AAVE tokens ($20M), a 15% common equity position in Aave Group (the entity behind the protocol), and a total package valued at approximately $71 million, Kraken would invest 35,000 ETH (~$55M).

This development occurs as Aave recovers from the KelpDAO exploit in April, which caused billions in deposit outflows despite Aave’s smart contracts remaining safe. For Payward (Kraken’s parent), this represents a strategic move to broaden its portfolio before a possible IPO.

The agreement coincides with Standard Chartered becoming openly bullish on the AAVE token. Geoff Kendrick began covering AAVE with a price target suggesting nearly 50-fold growth by the decade’s end—bringing it to roughly $4,000 compared to about $81 today—based on the bank’s forecast that tokenization and onchain lending will fuel massive expansion in DeFi. Thus, in a single week, we see a major banking institution wagering on the token while a major exchange invests in the firm.

However, there’s a catch, at least for current or potential token holders. While Kraken’s deal places Aave’s company valuation at $385 million, the AAVE token’s market cap hovers around $1.24 billion. That’s over three times the equity valuation. In the traditional finance world, value resides in the company because it controls the business and its revenue streams. Yet, crypto is a unique case, and interpreting the relationship between token value versus company value has been a major discussion of this current market cycle.

Regarding Aave, a significant portion of the protocol’s economic benefits are directed to the token, specifically through the DAO treasury and its buyback initiative that uses protocol earnings to buy AAVE, while the business primarily focuses on software development and operations. Therefore, the market is essentially demonstrating that the token holds the majority of Aave’s value, or that the token appears more expensive compared to the underlying business. Kraken avoided choosing just one option, acquiring both tokens and equity in the transaction. But for an outside observer, investing in a token trading at more than three times the value of the underlying company is challenging.

We will soon discover whether the market adjusts this gap or accepts the valuation difference…

🤖 BlackBerry Shares Soar 20% as It Transforms into a Physical-AI Software Contender

On Thursday, BlackBerry stock jumped almost 20% following better-than-expected earnings and an upward revision of its guidance, as the former smartphone manufacturer embraces its role in the physical-AI and robotics foundation. Q1 revenue hit $152.9 million, representing a 26% annual increase and significantly exceeding the $138 million estimate, accompanied by a 144% surge in adjusted EBITDA, marking the company’s first positive fiscal Q1 cash flow in nine years.

The star performer is QNX—BlackBerry’s embedded operating system, which saw a 26% growth to $72.3 million. QNX is a precise, safety-approved real-time OS currently installed in over 275 million cars. The very characteristics that ensure its dependability in vehicles also make it highly valuable for robotics and autonomous systems, where software errors can lead to physical risks. Hardware manufacturers such as Nvidia and AMD already employ it in smart vehicles and robots, and BlackBerry is establishing itself as essential infrastructure for software-defined vehicles, robotics, and industrial automation.

Essentially, the updated narrative positions BlackBerry as a “pick-and-shovel” investment in physical AI. Robots and autonomous platforms require an infallible operating system, and that is BlackBerry’s niche with QNX. A study by QNX discovered that 89% of robotics developers consider physical AI crucial to their plans, and the stock movement indicates that Wall Street is starting to view BlackBerry as an AI and robotics play.