M&A in crypto markets rises to nearly $ 2.7 billion in Q2 this year; Coinbase, FTX top buyers
In terms of volumes, however, M&A in Q2 was down compared to the previous quarter. In the second quarter, the number of agreements in the cryptocurrency market 44 was somewhat lower than the 48 agreements seen in the first quarter of the year.
Last year, the number of agreements was record high at 180 and increased by as much as 205% on an annual basis. Contracts totaled $ 7.8 billion in 2021, rising an impressive 500% year-on-year.
The number of agreements was 59 and 58, which amounted to $ 1.301 billion and $ 234 million in 2020 and 2019, respectively.
Over the past 24 months, the world’s largest cryptocurrency exchange, Coinbase was the best buyer, followed by Graph Blockchain, FTX, Yearn and Gemini.
Architect Partners in the report said that the first half of 2022 M&A activity exceeds last year’s record pace, but the second half is more opaque, most likely declining somewhat. Furthermore, valuations are negatively affected, but sound company values remain high in relation to general technology and fintech sectors due to growth potential and capital dedicated to crypto.
Furthermore, the report emphasized that private financing is at a record pace in the first half of 2022, both in terms of the number of transactions and total capital.
However, the architect’s report also said that the total capital raised is lower and is likely to continue to do so through the second half of the year.
Seed and early-stage transactions are ~ 90% of all transactions, while they attract ~ 50% of total capital invested with – games, investment and trading infrastructure, and brokers and exchanges are the most active sub-sectors, the report added. Meanwhile, subsequent transactions accounted for 10% of all transactions, while attracting 50% of total capital invested with data and data analysis, brokers and stock exchanges and investment and trading infrastructure as the most active sub-sectors. In the first half of the year, sub-sectors that earn the highest valuations are investment and trading infrastructure, games and payment infrastructure.
Among the overall transactions were – Fireblocks ($ 550m @ $ 8000m), Yuga Labs ($ 450m @ $ 4000m), Consensys ($ 450m @ $ 7000m), Polygon ($ 450m @ n / a), Circle ($ 400m @ n ) / a), FTX ($ 400m @ $ 32 000m), FTX US ($ 400m @ $ 8000m), Compute North ($ 385m @ n / a), Animoca ($ 359m @ $ 5,359m), Near ($ 350m @ n / a), Opensea ($ 300m @ n / a).
In the first half of the year, crypto-native investors will also remain the most active allocators, with traditional investors constantly increasing their participation.
“Bridging transactions, those between” legacy “and” crypto “companies already represent 49% of M&A, expect this to increase over time,” the report added.
According to the report, exchanges, exchange infrastructure, mining and data and data analysis are both the most mature and probably most active sub-sectors through the turn of the year 2022.
“Distressed M&A will be widespread in Q3, the consequences of the Q2 challenges will be seen,” according to the report.
At Architect Partners, Vetle Lunde analyst at Arcane Research said that during the first half of 2022, we have seen M&A activity in line with last year’s M&A pace, with a total of 92 agreements. Assuming a corresponding growth rate in the second half of the year, we can expect 184 agreements, slightly above the total for 2021 of 180 agreements.
Lunde concluded that “legacy companies account for a larger share of M&A activity in the market, which reflects a long-term positive view of the industry, despite the challenging six months that have passed.”
