Crypto M&A set to notch record, says PwC

NEW YORK: Deal activity in the cryptocurrency sector soared in 2020 and is likely to keep climbing this year, according to a report.

The total value of mergers and acquisitions in crypto more than doubled last year to US$1.1bil (RM4.5bil) from 2019, and average deal size rose to US$52.7mil from US$19.2mil, PwC said in a market overview released yesterday. A greater percentage of activity is taking place in Europe and Asia, and crypto fundraising increased by 33% in overall value from the prior year.

Last year was a record for M&A and crypto fundraising but 2021 “is already on track to significantly surpass it from every single metric, ” said Henri Arslanian, PwC global crypto leader. Institutional players, large investors and cash-rich crypto platforms will drive activity, he said.

These latest data support the case that the cryptocurrency market is expanding. Bitcoin’s ninefold rise in the past year, more interest from large investors and endorsements from big names in finance have bolstered the asset class. But many skeptics remain, amid concerns that the boom in tokens reflects the impact of supersized stimulus and is a bubble that could burst.

Along with greater consolidation, PwC predicts the industry will become more institutionalised. The report cites the gains in crypto markets -- which saw Bitcoin catapult to a record high near US$62,000 this month -- as well as the buzz surrounding central bank digital currencies, stablecoins, decentralised finance and nonfungible tokens. — Bloomberg