After a brisk start to the year, crypto M&A deals have reached their own “winter.”
Earlier this month, one-click checkout company Bolt It dropped its plans to buy a crypto and payment infrastructure company wire for $1.5 billion. This news came just over three weeks after the digital asset investment firm Galaxy Digital Canceled the proposed $1.2 billion acquisition of California-based Palo Alto BitGo.
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Abandoned deals – totaling about $2.7 billion – help illustrate what appears to be a cold M&A landscape as the cryptocurrency industry tries to find its footing after hitting an all-time high last year.
According to Crunchbase dataM&A activity targeting VC-backed crypto startups reached an all-time high in the first quarter of the year when 16 companies were announced. However, the pace of deals has fallen slightly, with only seven deals in the past two quarters nearly complete.
While the number of deals has slowed to the point of drip, there haven’t been many great deals. Silvergate BankBuying technical assets of a blockchain-based payment network dim—The stablecoin originally developed by Facebook Engineers – for $182 million is the largest deal involving a VC-backed entity of the year.
Perhaps that shouldn’t be surprising given the current market conditions. All the trades announced in the first quarter came just weeks or months after Bitcoin and many cryptocurrencies hit all-time highs in November – Bitcoin itself was flirting with $68,000.
Since those strong days, Bitcoin has fallen more than 70% and traded frequently below $19,000.
Just as investors have given up on the cryptocurrency market, some enterprising investors have also slowed the pace of their investments in this sector. Investment in VC-backed crypto companies has slowed over the first half of the year and seems unlikely to reach last year’s high of around $19 billion.
It appears that M&A deals have followed suit, as companies like Bolt and Galaxy Digital had other thoughts on the deals the two companies announced in the second quarter of fanfare before canceling them in the third.
I’m looking for a deal
This does not mean that the flow of deals will remain slow or stop completely – in fact, it can rise.
It only makes sense for companies that announced deals early in the year to pull out as valuations around the crypto sector drop. These drops in valuations can bring in more buyers as companies and individuals search for a good deal.
FTX Executive Director Sam Bankman Fried He has shown that he is more than willing to look for potential deals and said recently Interview with Squawk Box on CNBC That the stock exchange giant has at least $1 billion to use for acquisitions and rescues.
Cryptocurrency exchange giant Queen Piece It also made clear his intentions in space. During the company’s Q2 earnings call last month, Coinbase President and COO Emily Choi He said the company will continue to be active across both projects and mergers and acquisitions — adding that these tools have helped the company access innovation in the crypto ecosystem.
“It is an area that has helped us get into the innovation that is happening in the crypto ecosystem,” she said. “And crypto-winter we consider builders’ markets. It is often the best time for us to be greedy when others are afraid.”
To see more of our Web3 coverage, visit Crunchbase’s Web3 Tracker – a new site for a look at startups, investors, and funding news related to all aspects of Web3, cryptocurrency, and blockchain.
Clarification: Dom Guzman
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