Business Maverick

Crypto M&A Surges Past 2019 Total as Rest of World Eclipses US

By Bloomberg 15 October 2020
Caption
Racks of application-specific integrated circuit (ASIC) devices and power units operate inside a rack at the BitRiver Rus LLC cryptocurrency mining farm in Bratsk, Russia, on Friday, Nov. 8, 2019. Bitriver, the largest data center in the former Soviet Union, was opened just a year ago, but has already won clients from all over the world, including the U.S., Japan and China. Most of them mine bitcoins. Photographer: Andrey Rudakov/Bloomberg

Deal value in the cryptocurrency world surpassed the total from 2019 in the first six months of the year as tie-ups became less frequent but bigger, according to PwC.

Global deal value was $597 million in the first half of 2020 compared with $481 million over the whole of last year, PwC said in a report on the crypto merger, acquisition and fund raising landscape. While 2020 includes the purchase of CoinMarketCap.com by Binance Holdings Ltd., even factoring out that deal valued at $400 million in the report, the average size has risen but not the quantity — there were 125 tie-ups in 2019 versus 60 in the first half of 2020, PwC said. Activity continues to shift away from the Americas, with 57% of volume in Asia-Pacific and Europe, the Middle East and Africa in the first half versus 51% last year.

“We expect crypto M&A activity to remain strong for the coming months particularly with some of the larger or more profitable players acquiring firms that offer ancillary services to their current offerings,” said PwC Crypto Leader Henri Arslanian. “We should expect the large crypto unicorns to become increasingly like ‘crypto octopuses’ by acquiring or investing in various ancillary businesses in order to remain dominant.”

Bitcoin has had a turbulent year but is back above $11,000

Crypto as an asset class is having a good year. The Bloomberg Galaxy Crypto Index is up more than 80%, compared with a gain of less than 10% for the S&P 500, as digital money benefits from a boom in decentralized finance and a maturing of the market. Companies like Square Inc. and MicroStrategy Inc. have put some of their money in crypto, as has legendary investor Paul Tudor Jones, boosting demand and demonstrating interest from bigger players.

The first half of this year also saw an increase in fund raising involving crypto exchanges or trading companies, PwC said. The report attributed the gain to rising crypto prices, increased institutional interest and greater regulatory clarity.

Gallery

EMERGING MARKETS

Easing does it: Emerging market central banks drink the QE Kool-Aid

By Ed Stoddard

Because it was banned in the 1900s the majority of Americans do not know that blackcurrant flavoured anything is in actual fact a normality worldwide.