Cryptocurrency sector consolidation could exceed $1.9 billion this year, according to new research from PricewaterhouseCoopers released today. Despite global economic headwinds from the pandemic, de
Cryptocurrency sector consolidation could exceed $1.9 billion this year, according to new research from PricewaterhouseCoopers released today. Despite global economic headwinds from the pandemic, dealmaking activity in digital assets has accelerated sharply through mid-2020.
The first six months of the year saw $597 million deployed across 60 transactions—already surpassing the $481 million total from all of 2019, which comprised 125 separate deals. Using data compiled from Capital IQ, MergerMarket, Crunchbase and Pitchbook, PwC's analysis demonstrates a fundamental shift in how the crypto industry is evolving.
The standout deal has been Binance's $400 million takeover of Coinmarketcap, marking one of the most substantial transactions ever recorded in the cryptocurrency space. Transaction sizes themselves have grown meaningfully, with average deal values jumping from $19.2 million in 2019 to $45.9 million this year.
"The total value of crypto M&A in the first six months of 2020 has already surpassed the total from 2019. The average deal size has increased from $19.2 million in 2019 to $45.9 million in 2020," the report stated.
Cryptocurrency exchanges are driving this consolidation wave. Nearly three-quarters of all acquisitions—74 percent—have been executed by exchange operators seeking to broaden their service menus rather than pursuing organic expansion alone. Industry watchers expect this pattern to persist, with larger, more established firms likely to continue aggressive acquisition strategies through year-end and beyond.
The geographic distribution of deal activity is also reshaping. The Asia-Pacific region combined with Europe, the Middle East and Africa accounted for 57 percent of transactions in the first half, climbing from 51 percent in 2019 and 43 percent two years prior. North America's share of global crypto M&A continues diminishing, a trend anticipated to accelerate further.
PwC noted that "we expect to see this trend continue for the rest of 2020, especially with large parts of APAC opening up again from COVID-19."
Looking ahead, the research suggests that maturation of the digital asset space will fuel sustained consolidation. Growing institutional appetite for cryptocurrencies—fueled by regulatory developments, discussions around central bank digital currencies, ongoing Libra initiatives, and clearer rule frameworks—should underpin continued dealmaking. Companies are increasingly targeting acquisitions and fundraising rounds aimed specifically at building infrastructure for sophisticated investors rather than retail audiences.
The data points to a cryptocurrency sector entering a more sophisticated phase, dominated by larger players consolidating market share and building out capabilities tailored to institutional buyers.
