PricewaterhouseCoopers (PwC), one of the world’s leading accounting firm just released a report highlighting; how the majority of crypto-related mergers and acquisition (M&A) deals are now happening in Europe and Asia. The report highlights a shift as the crypto mergers are now common in places other than North America, that saw most of the M&A deals before this. The report was released on Thursday, 12th September at CoinDesk Invest Asia event.
In the accounting firm’s report analysis, it pointed out how more than 41% of all global financing deals of crypto startups took place in Europe in the second quarter of 2019. If we compare it to last year’s, Europe saw only 34% of global fundraising deals for crypto in the same period.
The Asian market has also seen some significant increase with almost 26% of the global fundraising deals happening in the second quarter of 2019. Combined, the Eurasia region took more than 67% of the funding hinting at a significant drop in the crypto funding deals in the American market.
However, the total number of fundraising deals and the total capital has fallen since 2018 as well. In Q1 of 2018, the global fundraising went as high as $408 million. Funding may have fallen due to dip in the crypto market worldwide, however, since the recent uptick in the bitcoin price, the overall funding has increased from $166 million in the first quarter to around $250 million in the second.
Lucy Gazmararian, senior manager of PwC’s Fintech and the crypto team, said during the invest Asia conference about the trend:
The price of bitcoin is the bellwether for the industry and for the sentiment of investors. As the price of bitcoin has recovered, we see the sentiment has become more positive and have seen more activities in fundraising and M&A activities.
The firm also said that they have observed a similar trend in the merger and acquisitions, the United States dominance has fallen considerably from 80% in the first half of 2018, to less than 50% in the second quarter of 2019.
Meanwhile, the M&A deals In Asia and Europe increased from just 17% to more than 50%. The company also observed that the cryptocurrency and mining sector related mergers and acquisitions have seen a sharp decline since the start of 2018 when the bitcoin downfall happened.
Since the start of 2018, funding and development have now been more focused on blockchain infrastructure development than cryptocurrencies. Gazmararian added:
Since the first half of 2018, we have seen the investment in the mining sector has been consolidating while healthy activity remains in blockchain, exchanges and trading infrastructure.
PwC’s FinTech and crypto leader for team Asia, Henri Arslanian also said something similar at the conference during his speech:
Except perhaps for crypto mining, we are seeing capital flow to every sector of the crypto industry, in particular, crypto exchanges as well as broader crypto trading and blockchain infrastructure companies.