PwC Shows a Healthy Trend in the European and Asian Crypto M&A Industries

PricewaterhouseCoopers, one of the largest auditing and financial advisory firms in the world, has revealed that a vast majority of mergers and acquisitions, as well as fundraising activities in the crypto-asset industry, have sprung up in Europe and Asia.

The Big Four professional services firm revealed its findings at the Invest: Asia conference, organized by CoinDesk, earlier today. Per the firm, both Europe and Asia have been able to take over dominance of the digital asset fundraising sub-industry from the Americas. 

In an analysis presented at the conference, PwC found that up to 41 percent of fundraising activities in the second quarter of 2019 alone were carried out in Europe. For better reference, Europe had only 34 percent of global fundraising deals finalized as at the same time in 2018. The analysis also showed an increase in crypto-asset fundraising across Asian markets, which now represent 26 percent of deals made in the quarter. 

Together, both European and Asian markets made up for 67 percent of crypto fundraising deals in Q2 2019. 

On the flip side, only 28 percent of all deals took place in American markets. The report also showed that the total number of crypto fundraising deals, as well as the amount of capital invested, have both declined by up to 50 percent. This is after they reached a high of $408 million in Q1 2018.

The report from the firm went on to note that fundraising deals have increased in value, attributing this surge to the increase in the Bitcoin trading price over the past few months. During Q2 2019, up to $250 million in deals were made; a significant increase over the $166 million made in Q1 2019.

Speaking on what the company believed could have caused this, Lucy Gazmararian, the Senior Manager at the FinTech and crypto division of PwC, said,  

“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.”

As for mergers and acquisitions, PwC found a similar uptrend as well. The share of the United States market in this field has declined, moving from over 80 percent in H1 2018 to just 48 periods after HQ 2019. In comparison, the European and Asian shares saw a spike, moving from just 17 percent in H1 2018 to 50 percent a year later. 

Elsewhere, PwC showed that crypto mining had taken the back seat in terms of M&A deals, as more investments seem to be related to the distributed ledger technology sector. 

Blockchain firms, cryptocurrency exchanges, and other trading platforms have gotten more attention from investors, and it is a bit easy to see why. Exchanges are primary asset custodians, and with the opportunity to branch out into even more, they present an effective opportunity for investors to diversify. 

Trading also remains a highly profitable activity in the crypto space, and given how well the market seems to have rebounded from the depths of the crypto winter of 2018, trading has gotten more life. As for blockchain, its potential to disrupt every other economic industry is yet to be maximized, and companies getting into the space are getting love from enthusiastic investors as well. 

As for mining, its impact on the environment, as well as fears of countries placing bans on the activity, should be more than sufficient to scare investors.