12 Jul 2022

Pace of crypto M&A deals on track with 2021 despite tumultuous times

While the first half of 2022 has been a clear bear market in crypto, the pace of the M&A activity in the crypto sector aligns with what we saw in 2021, per a new half-year report published by Architect Partners.
Source: Architect Partners (as of June 30th)
In a new report, Architect Partners reveal that M&A activity in the crypto market has remained high in 2022. During the first half of 2022, we have seen M&A activity aligning with last year's M&A pace, seeing a total of 92 deals. Assuming a similar growth rate in H2, we can expect 184 deals, slightly above the 2021 total of 180 deals. However, Q2 has been a challenging quarter for the crypto market, and it’s reflected in a slight decline in crypto-related M&A activity. We saw 48 deals in Q1, 2022, and 44 deals in the second quarter.Nevertheless, Architect Partners forecasts growth in distressed M&As in Q3, given the challenging state of the market. Thus M&A activity could still be high as distressed companies may become attractive targets in the coming period. Interestingly, the report noted a sharp growth in bridge transactions, i.e., transactions between legacy and crypto businesses. So far into 2022, 49% of all crypto-related M&As have been bridge transactions. This is a substantial growth from 2021, where 28% of the deals were bridge transactions. In other words, legacy businesses are accounting for a larger share of the M&A activity in the market, which reflects a long-term positive outlook on the industry, despite the challenging half-year that has passed.
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