Cryptocurrency mergers and acquisitions (M&A) skyrocketed from $1.1 billion in value in 2020 to $55 billion, representing a massive increase of 4,846%, according to a PwC report.
The average size of a merger and acquisition tripled, from $52.7 million to $179.7 million. The report notes that a few mega-billion SPACs were behind this substantial jump.
Cryptocurrency mergers and acquisitions agreements. Source: PwC
In addition, in 2021 the activity returned to the Americas. The region increased its share of the total number of M&A deals from 41% to 51%.
In terms of total value, Europe, the Middle East and Africa are slightly ahead at $25.5. The Asia-Pacific region lags far behind, with just $5 billion in merger deals.
PwC, a multinational corporation that provides assurance, consulting, and tax services, also reported on crypto fundraising efforts. The total value of those deals increased 645%, from $4.5 billion to $26.3 billion. The average amount also increased, by 143%.
Crypto fundraising offers. Source: PwC
It also noted that the number of venture capital firms funding cryptocurrency and blockchain projects increased in 2021, with 49 new funds. The total number of such VCs is now just under 500.
Trends in 2022
The report expects the momentum to continue in the industry, building on last year’s significant increase. Additionally, the increased number of venture capital funds is likely to drive the growth of cryptocurrency trading.
A key question is, the report suggests, whether crypto companies will continue to take advantage of SPACs as a funding opportunity. Special Purpose Acquisition Companies (SPACs) have exploded in 2021 as they offer a way for companies to avoid some of the regulatory scrutiny when going public.
The report also sees the continued growth trend in NFTs, DeFi (decentralized finance), Web 3, and the Metaverse. These segments of the blockchain space saw outstanding growth in 2021. PwC expects this trend to continue, but likely more with fundraising deals rather than mergers and acquisitions, as the technology is still in its emerging phase.
The rest of the crypto space will continue to mature in 2022, with more institutional players entering the picture. This will go hand in hand with further consolidation and expansion of the industry, the paper concluded.
The rise of the crypto industry
The crypto industry saw tremendous growth last year, financial industry reports show.
Last week, a document from accounting giant KPMG revealed that investments in the digital asset space soared 450%. An earlier report from LinkedIn suggested that the demand for crypto and blockchain jobs grew 395% during the same year.
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