Earlier today when I was searching on Google for crypto mergers and acquisitions over the last thirty days, I found stories like “ConsenSys acquires MyCrypto, plans to merge it with Metamask”, “OpenSea buys DeFi wallet startup Dharma Labs”, “Coinbase buys FairX to launch crypto derivatives”.
PwC reported in early February that crypto mergers and acquisition values went up 5,000% in 2021, with the average transaction size tripling in value, from $52.7 million to $179.7 million. The consolidation of cryptocurrency-related companies surged massively in 2021 and dealmaking momentum is expected to continue in the new year.
Already in 2022, Coindesk has reported 21 deals, echoing the phenomenal industry growth, with prices of digital assets skyrocketing and venture capital investment, increasing by almost 8x in 2021, reaching over $34.3 billion for crypto and blockchain startups.
Big players in the crypto market are formulating their strategies and making investments to ensure they are well-positioned for the future.
At the same time, the cryptocurrency market is making strides toward mainstream acceptance. Crypto companies are spending money on naming rights for sports stadiums, sponsorships, and Superbowl advertising to expand their customer base and bring crypto to the masses. Last week, Binance made a strategic investment of $200 million in Forbes, and in last week’s post, I wrote about Crypto.com and FTX advertising in this year’s Superbowl.
Ilias Louis Hatzis is the founder and CEO at Kryptonio wallet.
The total value of mergers and acquisitions in the crypto industry skyrocketed to nearly 5,000% in 2021 compared with the previous year, according to a new report from PwC.
Companies completed more than three times the size of those in 2020. The average deal size increased to around $180 million in 2021, driven in part by the 2021 SPAC boom.
Some of the notable deals last year was the $1.2 billion acquisition of BitGo by Galaxy Digital, and more than 13 acquisitions made by Coinbase.
The PwC report emphasized that in 2021 the digital asset industry was gaining “broader mainstream acceptance,” with traditional finance companies seeking to move into crypto, and make it part of their businesses through M&A.
One of the key themes in 2021 was secure crypto wallets and will continue to be in 2022, as more people get into the market. Last March PayPal acquired Curv for $200 million and as the year came to a close, Coinbase snapped up the BRD crypto wallet and Unbound Security, an MPC cryptographic security company.
Companies across industries were also attempting to take advantage and monetize of opportunities in decentralized finance and non-fungible tokens, as a component of their core businesses. As governments look closely at stablecoins and how to regulate them, big banks with billions in annual revenue from payments will be moving into the space by acquiring stablecoin issuers.
Most of these acquisitions have been funded by money pouring into the crypto industry from venture capital firms. Globally, venture capital invested over $34 billion into crypto companies in 2021.
Ahead of an expected deal-making frenzy in 2022, Architect Partners merged with Emergents to create one of the largest M&A firms dedicated exclusively to crypto.
The crypto market has witnessed a significant uptick in getting millions of dollars in payouts, and opportunities for M&A deals will continue to abound. The number of deals across sectors highlights the continuing maturity of the crypto market and is a sign of the broader adoption of crypto products. Acquisitions will play a key role, especially for non-crypto tech companies to find crypto developers and enter the space. These are exciting times and while the market is still in flux, as it matures startups will seek exits, and market leaders will continue their buying spree in a bid to maintain their lead.
Subscribe by email to join the other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research.
