Are Crypto Firms Selling Themselves Due to Lack of Venture Capital Interest?

Architect Partners’ reports revealed that mergers and acquisitions (M&A) hit an all-time high in Q1 2023. Are crypto firms looking for an exit?

According to a Bloomberg article, there were 54 transactions related to crypto M&A deals in the first quarter of 2023. The article cites data from Architect Partners, an M&A advisory firm.

The crypto M&A exceeded the previous record of 53 deals from Q4 2021 when Bitcoin hit an all-time high of $69,000.

Source: Bloomberg

Crypto Firms Resorting to M&A as an Exit?

Michael Ashe, the head of investment banking at Galaxy Digital, said, “Companies that would have been able to raise capital in a bull market are finding it difficult to do so now and are turning to M&A as an exit.”

The statistic that approximately 65% of the mergers and acquisitions in the last quarter were initiated by one crypto company acquiring another, mentioned in the Architect’s report, could potentially strengthen Ashe’s comment.

The report also revealed that private crypto financing decreased from $12 billion in Q1 2022 to $3 billion in the previous quarter.
Nonetheless, with Bitcoin’s price surging by 80% in 2023, there has been a corresponding uptick in the number of crypto venture capitalist deals.

BeInCrypto previously reported that the number of funding deals closed rose to 439 in Q1 2023 compared to 366 in Q4 2022.

Source