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Americas’ Share in Crypto M&A and Fundraising is Shrinking

Americas' Share in Crypto M&A and Fundraising is Shrinking 101
Source: Adobe/Evgene Kudryavtsev

The Americas are loosing their share in crypto mergers and acquisitions (M&A) and fundraising, according to major consulting company PwC.

In their latest report which looks into the first six months of 2020, PwC found that the total value of crypto M&A in the first half of this year surpassed the total seen in 2019, while the average deal size went up as well.

However, the report said that,

“Crypto M&A deal activity continues to shift away from the Americas, with 57% of deals occurring in APAC [Asia-Pacific] and EMEA [Europe, the Middle East and Africa] in H1 2020.”

It goes on to say that this percentage is an increase from 51% seen in 2019, as well as from 43% seen in 2018.

Separately, 30% of the deals were done in APAC, up from 26% in 2019, while 27% happened in EMEA, up from 25%.

Americas' Share in Crypto M&A and Fundraising is Shrinking 102
Source: PwC

“Asia already plays an important role in the global crypto ecosystem, from central bank digital currencies to crypto exchange trading activity, so it’s natural to see the region play an important role when it comes to global crypto M&A activity,” said Henri Arslanian, PwC Global Crypto Leader, in an emailed comment.

And that’s not all the bad news for the Americas.

The PwC report found that, globally, the number of equity fundraising deals went down in H1 2020, but that the total amount raised by crypto companies “remained relatively stable.” Fewer deals were made overall, but the average deal size increased by 33%.

Once again, the report said that,

“We continue to see APAC and EMEA be home to the majority of crypto equity fundraising deals.”

Together, these two regions boast 56% of total crypto fundraising deal count, compared to 54% in 2019. Separately, EMEA has 32%, and APAC 24% in H1 2020. The Americas are down from 44% to 42%.

Americas' Share in Crypto M&A and Fundraising is Shrinking 103
Source: PwC

The report further found that the first half of 2020 saw an increase of M&A transactions involving crypto exchanges and trading infrastructure, driven mostly (74%) by existing players’ strategic acquisitions. These used M&A “to expand their offering as opposed to relying solely on organic means.”

“We should expect the large crypto unicorns to become increasingly like crypto octopuses by acquiring or investing in various ancillary businesses in order to remain dominant,” Arslanian said. He added that M&A activity will remain strong in the coming months, especially “with some of the larger or more profitable players acquiring firms that offer ancillary services to their current offerings.”

Furthermore, crypto and blockchain companies are found to still be “the biggest source of M&A activity in the sector.” Looking at the deal count by buyer type, in 2019 crypto and blockchain companies accounted for 48% of the total number, with the same percentage reached in the first half of 2020 alone.

Compared to last year when wallet and data companies were the most common crypto M&A targets, in H1 2020, 5 out of 10 top deals involved crypto exchanges or trading companies, such as crypto exchange Binance‘s March acquisition of CoinMarketCap for USD 400m.

There was also an increase in fundraising activities involving crypto exchanges and trading companies, thanks to the increase in crypto prices, regulatory clarity and interest by institutional players, among other factors. One such example is the USD 300m Series B fundraise of crypto derivatives provider Bakkt, said PwC.

Seed rounds accounted for 50% of all the crypto fundraising deals in H1 2020, while the major funding source for crypto companies still remain traditional VCs (36%) and crypto-focused VCs and funds (19%).

Nine of the top ten fundraising deals were in the trading infrastructure and blockchain infrastructure sector, while half of the ten happened in the US.

Crypto-focused funds and crypto incumbents are the top 5 investors, and these, like in 2019, include crypto exchange Coinbase, blockchain company ConsenSys, and venture capital firm Fenbushi.
Learn more:
Bithumb Operator Wants At Least USD 430m For Its Stake In Exchange – Report
New Asian Crypto Behemoth Blessed But Merger Delayed
Expect More M&As As New Type of Buyers to Compete With ‘Crypto Octopuses’

Sead Fadilpašić , 2020-10-15 10:46:20 ,

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NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.

While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock

Nick Chong , 2019-11-10 12:00:38

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