PwC this week have published their bi-annual report on M&As in the crypto space, will 2020 see investments increase from the year before?
Crypto companies have been moving out of the US and heading to Asia and Europe, according to PricewaterhouseCoopers’ 2nd Global Crypto M&A and Fundraising Report.
The accounting titan’s analysis has examined the volume and value of crypto fundraising – revealing that investment declined at the end of 2019 compared to the previous year. In addition to this, US investment was shown to shift to Asian and Europe and into more diversified sectors.
Predictions for 2020
The report also has some analysis of the year ahead, with the report claiming that the crypto space will not be immune to global macro-economic conditions, but that they “expect to see further consolidation in the industry with some of the larger well-funded or profitable firms buying some of the smaller players in the market.”
This shows that the crypto space will continue to consolidate and mature, with the report also claiming that larger companies will look to acquire smaller ones with complimentary services, e.g. crypto media outlets – in fact, almost half of all mergers and acquisitions (M&As) in 2019 were said to be crypto companies trying to expand the services they offer. The trend was seen in action this week in 2020 however, with Binance finalising its purchase of CoinMarketCap for an undisclosed sum, although it is said to be as much as $400 million.
There was also speculation that the trend of global crypto investment funding and M&As flowing to Asian and European markets is set to continue, as well as investors seeing the current market turbulence as a good time to invest.
The European market has seen a shakeup this week however, with the news that Covid-19 has had a detrimental impact on crypto projects based in Switzerland. This could lead to further (M&As) over the coming months, potentially meaning bargain acquisitions for crypto projects that are still earning healthy profits.
The report shows that there has been flurry of activity over the last two years in the crypto market; as the space is still so young, the smaller fish are still there to be snapped up by the larger companies, although it is likely to look a lot different to this in a few years’ time as market value consolidates into fewer exchanges and the battle for market dominance begins in earnest.