Business / #ForbesBusiness

February 13, 2019,   5:32 PM

Despite Crypto Depression, M&A Deals Set New Record

Michael del Castillo


bitcoin drops


As the cumulative market cap for cryptocurrencies dropped from an all-time high of $813 billion in 2018 to just $130 billion at the end of the year, the industry was quietly consolidating at a historic rate. A record $559 million worth of cryptocurrency-related mergers and acquisitions deals took place in the United States in 2018, according to data provided to Forbes by Pitchbook, a financial database for investors. The previous record was set in 2010, when $353 million in deals were recorded.

As skeptics of cryptocurrency and other applications of blockchain have been scared away by the drop in prices, the high volume of behind-the-scenes movement shows a consolidation of resources and talent that could help the industry mature going forward. Much of the M&A activity was driven by a few high-dollar deals.

A table of the largest industry M&A deals in the U.S., also provided to Forbes, showed that four of the ten occurred last year. The largest U.S. cryptocurrency-related acquisition of all time happened in February 2018 when crypto finance company Circle bought the Poloniex cryptocurrency exchange for $400 million. Also last year, crypto exchange Coinbase bought tasks platform Earn for $120 million, blockchain analytics firm Blockseer was purchased for $14.8 million and bitcoin tax firm Node40 was purchased for $14.7 million.

Last year’s U.S. cryptocurrency and blockchain activity was also notable for the number of deals. Pitchbook tracked a record 54 industry deals last year, a whopping 170% higher than the previous record, set in 2017, when 20 deals were closed.

In total, Pitchbook tracked $1.1 billion of U.S. crypto M&A activity since 2008, meaning that almost half of all industry deals occurred last year. Total U.S. M&A deals also increased in 2018, according to Pitchbook’s annual M&A report, but at a significantly lower rate. Between 2017 and 2018, deals increased 6.8% to $2 trillion.

So far, 2019 is shaping up to be another record-breaking year for blockchain M&A. In the U.S. alone, cryptocurrency exchange Kraken spent $100 million on CryptoFacilities, a U.K.-based cryptocurrency futures platform; Coinbase bought blockchain APIs startup Blockspring for an undisclosed amount; and Facebook made its first blockchain deal, spending an undisclosed amount on the smart contracts startup Chainspace.


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