Crypto mergers and acquisitions increased 5.000% in 2021.
2021 was not one of the best years for cryptos, but despite that the crypto sector’s total market cap grew by 187.5% in 2021, Bitcoin increased 113% and Ethereum 324%.
But do you think that this is insane? The total value of mergers and acquisitions in the crypto industry skyrocketed nearly 5,000% in 2021 compared with the previous year.
PwC said in a report that the average size of a merger or acquisition in crypto jumped to about $180 million in 2021, compared with an average of about $52 million a year prior.
In the second half of the year alone, six different crypto companies lined up blank-check mergers worth more than $2.7 billion apiece. But the surge was aided by deals of all sizes, with 393 total transactions taking place last year compared to 118 in 2020 and 125 in 2019.
Some people argue that M&A are going to be even bigger once the governments regulate the industry, but in spite of that, the figures of 2021 brought a lot of media attention and that is why today we are going to talk about the top M&A that you should know about in 2022!
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Top Crypto Mergers and Acquisitions.
Digital investment advisor Betterment has acquired robo-advisory firm Makara that offers cryptocurrency. The acquisition’s terms were not disclosed.
While many millennial-focused apps, like Robinhood, were quick to integrate cryptocurrencies into their offerings, Betterment took its time in coming to the asset class.
According to Reust, the Makara acquisition will improve the outcomes of a Betterment portfolio by helping users diversify into cryptocurrencies in a “responsible manner.” What this means is that their platform will help investors move away from making random crypto forays—triggered by price changes and breathless news coverage of the asset class—to a more structured schedule of investments through robo-advisors and based on their financial goals and objectives.
Reust makes the case that Betterment’s robo-advisory platform will help take the uncertainty out of crypto investments by automating and integrating changes, as and when they occur.
FTX has acquired Blockfolio, the market’s leading mobile news and portfolio tracking app, for $150 million. The price was paid in cash, crypto and equity.
The combined company aims to “build a new standard for quality in retail trading experiences,” said Blockfolio CEO Ed Moncada.
Nine months ago, the companies began discussing plans to build a retail-focused cryptocurrency product together. Those discussions eventually morphed into merger talks.
“FTX checked every box we were looking for in a partner,” Moncada told CoinDesk. “They understood the vision of what we wanted to build.”
The deal appears to be the sixth-largest acquisition in crypto sector history, or at least it was in 2020!
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Crypto Mergers
Mastercard announced it has completed its acquisition of CipherTrace, a leading cryptocurrency intelligence company that offers digital asset security and fraud solutions for some of the world’s largest banks, exchanges and other financial institutions.
The deal creates an integrated offering that combines AI, cyber and blockchain capabilities to provide businesses with greater transparency to help identify and understand their risks and manage regulatory and compliance obligations. The acquisition advances Mastercard’s digital assets strategy and differentiates its real-time payments infrastructure.
“We help companies – whether they are banks or cryptocurrency exchanges, government regulators or law enforcement to keep the crypto economy safe,” said Dave Jevans, CEO, CipherTrace. “Our two companies share this vision to provide security and trust throughout the ecosystem. We are thrilled to join the Mastercard family to scale CipherTrace’s reach across the globe.”
Digital asset merchant bank Galaxy Digital announced today that it had acquired custodian provider BitGo for $1.2 billion in cash and stock.
Galaxy said it will use its balance sheet to fund the cash portion of the deal. When the deal closes, Galaxy will issue incremental shares to BitGo’s shareholders in exchange for net digital assets.
BitGo, founded in 2013, was one of the first companies to offer institutional-grade wallets and infrastructure products long before the recent bitcoin rally made corporations eye the asset for their balance sheet.
“The power of the technology, solutions, and people we will have as a result of this acquisition will unlock unique value for our clients and drive long-term growth for our combined business. We are excited to welcome Mike Belshe and the talented BitGo team to Galaxy Digital,” he added.
A pair of ambitious DAO communities led by young hotshot developer teams pulled off a massive merger via dual votes.
The Rari and Fei development teams initially proposed the idea of joining forces in mid-November, however, only after several weeks and a few rounds of modifications to the deal terms did the wider Fei and Rari communities embrace the concept.
Rari started as a sort of robo-advisor for generating yield from stablecoins, but over the past months has grown and evolved into a money market-like protocol with about $1.4 billion in total value locked — mostly stablecoins and DeFi-related tokens on Ethereum.
On the other hand we have Fei Protocol, launched months ago, as a novel iteration on the concept of a crypto-collateralized stablecoin. Like its forerunner, DAI — the stablecoin launched by MakerDAO four years ago — FEI is backed mostly by Ether. But unlike DAI, FEI is collateralized by an algorithmic reserve of protocol-controlled value (PCV), and it emphasizes liquidity rather than over-collateralization.
“Fei can permissionlessly grow the utility and use cases for Fuse, including streamlined lending bootstrapping and manipulation-resistant oracles. Rari is an ideal platform to enhance FEI demand and utility, as well as a place for PCV to grow via the upcoming Vaults,” Santoro wrote.
Crypto Mergers
Utah-based NFT company RTFKT joined the ranks of some of the world’s most iconic brands in December when Nike announced it had acquired RTFKT for an undisclosed sum. “This acquisition is another step that accelerates Nike’s digital transformation and allows us to serve athletes and creators at the intersection of sport, creativity, gaming, and culture,” Nike president and CEO John Donahoe said at the time.
Founded in 2020, by Benoit Pagotto, Chris Le and Steven Vasilev, RTFKT is a pioneering and innovative brand that redefines the boundaries of physical and digital value to serve their broad community of creators. This dedicated team leverages the latest in game engines, NFTs, blockchain authentication and augmented reality to create one of a kind virtual products and experiences.
“This is a unique opportunity to build the RTFKT brand and we are excited to benefit from Nike’s foundational strength and expertise to build the communities we love,” says Benoit Pagotto, one of RTFKT’s co-founders. “Nike is the only brand in the world that shares the deep passion we all have for innovation, creativity and community, and we’re excited to grow our brand which was fully formed in the metaverse.”
Yuga Labs, creators of the Bored Ape Yacht Club (BAYC), acquired the intellectual property (IP) of the CryptoPunks and Meebits collections from Larva Labs.
CryptoPunks and Meebits are popular non-fungible token (NFT) collections on the Ethereum blockchain.
CryptoPunks is a non-fungible token (NFT) collection on the Ethereum Blockchain. The experimental project was inspired by the London punk scenes, the cyberpunk movement, and electronic music artists Daft Punk. The crypto art blockchain project was an inspiration for the ERC-721 standard for NFTs and the modern crypto art movement, which has since become a part of the cryptocurrency and decentralized finance ecosystems on multiple blockchains.
The Meebits are 20,000 unique 3D voxel characters, created by a custom generative algorithm, then registered on the Ethereum blockchain.
As part of the acquisition, Yuga Labs owns the copyright for both the CryptoPunks and Meebits collections, as well as 423 CryptoPunks and 1711 Meebits. With this acquisition, they will own the CryptoPunks and Meebit brands and logos, and as they’ve done with their own BAYC collection, the company will transfer IP, commercial, and exclusive licensing rights to individual NFT holders.
Holders of CryptoPunks and Meebits should expect to receive new terms and conditions for their NFTs soon, granting them IP and commercialization rights.
Awesome summary of Finsmes
Microsoft was founded a few months after what may have been the first use of the term “internet.” In some ways the two have grown up together. Now, Microsoft wants to enter its next stage of life in lockstep.
Microsoft announced that it acquired Activision Blizzard, one of the biggest California-based video game holding companies in the world. Microsoft announced that the deal would bring the joy and community of gaming to everyone across every device.
Are you trying to guess the figures? Microsoft did a transaction of $68,7 Billion, which is the biggest purchase made by this company.
The acquisition of Activision would help Microsoft to enter inside the metaverse too since one of the first and major applications of this would be Play to earn Games.
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What is the strategy behind M&A inside the crypto market?
I did a post in LinkedIn some time ago talking and questioning if developing a project from scratch is the only way to get into NFTs.
There are many people who want to develop NFT projects without having the prior knowledge/resources necessary to succeed.
Some will select their favorite animal, create the 10,000 NFTs with an algorithm and launch a discord to post some announcements.
But unfortunately this is not the way, the job is not done yet… If it were that easy, anyone would do it, right?
Imagine the big corporations with their large existing fan bases… They could raise millions with just a few seconds but because of something they are choosing to go in a different direction.
Much of the success within this market is attributed to the quality of the holders and this to the professionalism/ambition of the project.
Great News!! Projects with these characteristics already exist.
Just look at BAYC or Cool Cats, these are projects with thinking, a long trajectory and a community that follows them everywhere.
That’s why many corporations are deciding to enter the market doing Partnerships, Mergers or Acquisitions.
In an environment where everything is new and innovative, entering alone is like jumping into a pool without knowing how to swim.
TIMES made a partnership with Cool Cats, encouraging its community to create memes reflecting the TIMES Cover with Cool Cats’ artistic style in exchange for certain NFTs that would be minted and designed by the project’s artist.
Adidas launched their announcement via Twitter Spaces and commented with PUNKS Comic and gmoney their entry into the SandBox Metaverse.
We already talked about Nike acquiring the most iconic Fashion NFTs company called RTFKT Studios to accelerate its digital transformation.
So, what’s the best? Develop a project from scratch or make partnerships/mergers/acquisitions from day 1?
The answer is: IT DEPENDS.
It depends on how much expertise you have, the resources you want to allocate, your ambition and the creativity of your team.
Success is relative but it definitely requires talent, if your company doesn’t have it yet, the best thing to do is to make strategic collaborations with projects that resonate with your vision and most importantly, your values.
