Crypto mergers and acquisition dealmaking is shifting into overdrive.
More than 200 deals worth almost $20 billion have already been announced this year, with the M&A market on pace to see deals worth up to $30 billion — over 10 times 2024’s $2.8 billion, according to Karl-Martin Ahrend, co-founder of crypto M&A firm Areta.
The number of deals is expected to reach nearly 400, up from 190 last year, he told DL News.
The surge is from “big conviction bets from people expanding their footprint geographically or product-wise, and traditional firms tapping into the crypto space,” Ahrend said.
The prediction comes as dealmaking in the crypto space has ramped up across the board. Venture raises into crypto projects have surged by 57% to over $15 billion this year, compared to last year, according to DefiLlama.
The soaring M&A deals signal that traditional financial services are increasingly muscling into digital assets, incentivised by the US government’s growing pro-crypto stance and growing regulatory clarity around the world.
Law firm White & Case notes “supportive government policies on both sides of the Atlantic,” from advancing US stablecoin rules to the EU’s MiCA regime, are pulling banks, card networks, and fintechs into crypto rails, boosting M&A activity.
Regulatory clarity has resulted in payments, custody, and market infrastructure firms emerging as prime acquisition targets, while crypto-native firms such as Coinbase execute add-ons to scale globally and diversify earnings beyond spot volume.
“Traditional financial services players are beginning to demonstrate increasing commitment to crypto and digital assets,” Architect Partners, an M&A advisory firm, said.
Architect Partners also noted that record public-market valuations and the return of later-stage financing has bolstered bigger businesses’ acquisition spree.
Moreover, there are over 50 crypto-native firms with significant dry powder to deploy into acquisitions, Ahrend said.
“The industry is still in its infancy, but it is massively evolving at a fast pace. There are definitely strong tailwinds,” he said.
Firms are opting to go the purchase route rather than build crypto teams and products internally, Ahrend said.
Big deals
High-profile deals this year underscore this momentum. “It’s not the cheap or scrap deals dominating,” Ahrend said.
This week, Kraken snapped up Breakout, a proprietary trading firm with performance-based services.
In August, Coinbase finalised its acquisition of Deribit, the world’s largest crypto options exchange, in a $2.9 billion transaction that establishes it as the global leader in derivatives.
Earlier this year, Stripe’s $1.1 billion purchase of stablecoin platform Bridge was the subsector’s largest acquisition to date.
And Ahrend’s says to expect more deal headlines in the future.
“Announcement cycles in M&A are fairly long so that a lot of deals are already in the pipeline and will make headlines later in the year,” he said.
