With the growing adoption of cryptocurrencies, the crypto industry continues to benefit from a large influx of capital from investors. This has helped amplify mergers and acquisitions in the cryptosphere over the years. PwC just revealed in their latest report that they achieved a massive 4,846% upside in 2021.
A practice that is developing more in America
According to data collected by PwC, mergers and acquisitions in the cryptosphere have grown from a value of $1.1 billion in 2020 to $55 billion in 2021. This spectacular growth has also been accompanied by an increase in the average size of an M&A, which is now $179.7 million. Additionally, 2021 has seen the business shift back to America. The region saw its share of the total number of M&A deals increase from 41% to 51%. In terms of the total value, Europe, the Middle East, and Africa are slightly ahead, with $25.5 billion.
The Asia-Pacific region is far behind, with only $5 billion in M&A deals. PwC also dwelt in its report on the evolution of cryptocurrency fundraising over the past year. The total value of these was $26.3 billion, which represents an increase of 645%. The report also states that the number of venture capital firms that finance crypto and blockchain projects increased in 2021. Thus, there would now be nearly 500 venture capital firms investing in the cryptosphere.
A trend that should continue in 2022
Building on the significant uptick seen last year, PwC expects the growth momentum to continue in 2022. investors a way to avoid some of the regulatory scrutiny when going public. She infers that companies in the cryptosphere will continue to exploit SPACs as a funding opportunity.
Furthermore, the report also notes the continuation of the growth trend of NFTs, DeFi, Web 3.0, and the metaverse. As these sectors are still in their emerging phases, PwC believes they are likely to attract more fundraising deals rather than mergers and acquisitions. To conclude, the company says that the rest of the cryptosphere will continue to mature in 2022 as more institutional players enter the scene.
More than just investment opportunities, mergers, and acquisitions in the cryptosphere contribute to further consolidation and expansion of the industry. The latter should continue to exploit them as the adoption of cryptocurrencies becomes more widespread in the world.
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