Circle Internet Financial, backed by Goldman Sachs, acquired Poloniex for a U.S. record $400 ... [+]
As the cumulative market cap for cryptocurrencies dropped from an all-time high of $813 billion in 2018 to just $130 billion at the end of the year, the industry was quietly consolidating at a historic rate. A record $559 million worth of cryptocurrency-related mergers and acquisitions deals took place in the United States in 2018, according to data provided to Forbes by Pitchbook, a financial database for investors. The previous record was set in 2010, when $353 million in deals were recorded.
As skeptics of cryptocurrency and other applications of blockchain have been scared away by the drop in prices, the high volume of behind-the-scenes movement shows a consolidation of resources and talent that could help the industry mature going forward. Much of the M&A activity was driven by a few high-dollar deals.
A table of the largest industry M&A deals in the U.S., also provided to Forbes, showed that four of the ten occurred last year. The largest U.S. cryptocurrency-related acquisition of all time happened in February 2018 when crypto finance company Circle bought the Poloniex cryptocurrency exchange for $400 million. Also last year, crypto exchange Coinbase bought tasks platform Earn for $120 million, blockchain analytics firm Blockseer was purchased for $14.8 million and bitcoin tax firm Node40 was purchased for $14.7 million.
Last year’s U.S. cryptocurrency and blockchain activity was also notable for the number of deals. Pitchbook tracked a record 54 industry deals last year, a whopping 170% higher than the previous record, set in 2017, when 20 deals were closed.
In total, Pitchbook tracked $1.1 billion of U.S. crypto M&A activity since 2008, meaning that almost half of all industry deals occurred last year. Total U.S. M&A deals also increased in 2018, according to Pitchbook’s annual M&A report, but at a significantly lower rate. Between 2017 and 2018, deals increased 6.8% to $2 trillion.
So far, 2019 is shaping up to be another record-breaking year for blockchain M&A. In the U.S. alone, cryptocurrency exchange Kraken spent over $100 million on CryptoFacilities, a U.K.-based cryptocurrency futures platform (exact number not disclosed); Coinbase bought blockchain APIs startup Blockspring for an undisclosed amount; and Facebook made its first blockchain deal, spending an undisclosed amount on the smart contracts startup Chainspace.
Be among the first to get important crypto and blockchain news and information with Forbes Crypto Confidential. Sign up for free now.
