Mergers and acquisitions in the cryptocurrency sector could reach $ 1.9 billion this year, despite Covid-19 affecting the global economy
A report by PricewaterhouseCoopers (PwC) released today shows that mergers and acquisitions (M&A) in the cryptocurrency sector could reach $ 1.9 billion by the end of 2020, despite coronavirus affecting the global economy.
According to the PwC report, $ 597 million was spent on 60 transactions in the first half of the year. The number has surpassed the $ 481 million spent throughout 2019 (125 deals total).
PwC data from M&A data firms Capital IQ, MergerMarket, Crunchbase and Pitchbook showed that Binance’s acquisition of Coinmarketcap for $ 400 million was one of the largest in the history of the crypto market and the most significant of the year.
“The total value of crypto M&A in the first six months of 2020 has already exceeded the total value of 2019. The average business volume has increased from USD 19.2 million in 2019 to USD 45.9 million in 2020 increased, “added the report.
Most of the business was done from crypto exchanges to grow their business. PwC reported that 74% of its acquisitions were made by crypto exchanges that use M&A to expand their offerings rather than relying solely on organic funds to grow their business.
The trend is expected to continue. PwC expects further consolidation in the crypto sector, with some of the larger and more profitable companies continuing their M&A activities.
PwC also presented some interesting facts about the shifts within the cryptocurrency space. There is a geographic shift in terms of cryptocurrency business. Crypto M&A deals continue to shift from America to other regions. 57% of transactions in the first half of 2020 took place in the Asia-Pacific (APAC) and Europe, Middle East and Africa (EMEA) regions. This is an increase from 51% in 2019 and 43% the previous year.
The move away from America is expected to continue for the remainder of the year. PwC stated, “We expect this trend to continue for the remainder of 2020, especially as large parts of the APAC reopen from COVID-19.”
PwC assumes that the industrialization of the cryptocurrency sector will continue to increase in the coming years. Institutional interest in digital assets will continue to grow due to talks about central bank digital currencies, Libra, and increased regulatory clarity. For this reason, PwC forecasts M&A deals and fundraising processes from industry players that aim to develop solutions for institutional players.