PwC Report Reveals Impressive Growth in Crypto Asset M&A Realm in Asian and European Markets

The majority of mergers and acquisitions (M&A) deals and fundraising activities in the crypto asset industry are taking place in Asia and Europe, according to a recent report from “Big Four” professional services firm PricewaterhouseCoopers (PwC).

Asian and European markets have reportedly surpassed the once dominant role of the Americas in digital asset fundraising, PwC’s report reveals. Released on September 12, 2019 at the Coindesk Invest: Asia event, the auditing firm’s analysis of the cryptocurrency and blockchain ecosystem found that 41% of global fundraising activities in Q2 2019 were carried out in Europe.

During the same time period last year, only 34% of all global fundraising deals were finalized in Europe.  

Crypto asset fundraises in Asian markets have also increased significantly. They now represent 26% of all deals made in Q2 2019.

In total, Asian and European markets accounted for 67% of global crypto fundraising deals during Q2 2019.

Meanwhile, only 28% of all deal took place in the Americas during the second quarter of this year.

However, the total number of crypto-related fundraising deals and the amount of capital invested has declined by over 50%, after reaching a high of $408 million in Q1 2018.

$250 Million in Crypto Fundraising Deals Made in Q2 2019

PwC’s report further notes that there’s recently been an increase in the value of fundraising deals, after the Bitcoin price began recovering. During Q2 2019, deals worth a total of $250 million were made, up significantly from only $166 million in Q1 2019.

Senior manager at PwC’s fintech and crypto division Lucy Gazmararian stated at Invest: Asia:

“The price of Bitcoin is the bellwether for the industry and for the sentiment of investors. As the price of [the cryptocurrency] has recovered, we see the sentiment has become more positive and have seen more activities in fundraising and M&A activities.”

The PwC report also mentioned that the company’s researchers found a similar trend in the M&A area, in which the share of the US markets has declined from more than 80% during H1 2018 to only 48% for the same period in 2019.

In comparison, the number of M&A deals in Asia and Europe increased from just 17% in early 2018 to now more than 50%.

Investments and M&As Now Focused on DLT Sector

There’s been a sharp decline in M&A deals in the crypto mining sector since early 2018, as investment interest appears to now be focused on distributed ledger technology (DLT) infrastructure. 

Gazmararian pointed out:

“Since the first half of 2018, we have seen the investment in the mining sector has been consolidating while healthy activity remains in blockchain, exchanges and trading infrastructure.”

PwC’s fintech and crypto head for Asia Henri Arslanian noted:

“Except perhaps for crypto mining, we are seeing capital flow to every sector of the crypto industry. In particular, crypto exchanges as well as broader crypto trading and blockchain infrastructure companies.”