When Bitcoin (CRYPTO: BTC) lost its dubbing of an ominous bubble in 2018, many large players started entering the cryptocurrency market, dragging along with them the first M&As. It was then at the end of February 2018 when Circle, a Goldman Sachs startup focused on mobile payments and cryptocurrencies, acquired the Poloniex exchange for $400 million. “These markets are still in their infancy but they hold enormous promise,” as commented by Circle CEO Jeremy Allaire at the time.

Coinbase Global Inc (NASDAQ:COIN) then bought the Cipher Browser mobile wallet and Earn.com social network. BitGo bought out the Kingdom Trust company, which manages over $12 billion and has more than 100,000 global customers. Cryptocurrency exchange Binance chipped in as well by buying Coinmarketcap for $400 million, making it one of the most discussed deals on the market. According to data provided by the PricewaterhouseCoopers consulting company, the total volume of mergers and acquisitions in 2020 reached around $1.1 billion in volume, up from $481 million in 2019. At the end of 2021, the volume of M&As in the cryptocurrency market had reached $55 billion, a colossal leap from the $1.1 billion mark a year earlier, demonstrating 4,868% growth.

Businesses usually grow stronger through M&As, strengthening their positions and influence in the market. Take for example the purchase of CoinMarketCap by Binance, which finally secured the latter the status of an industry giant. A sensational journalistic investigation later, several crypto companies simultaneously expressed interest in gobbling up Coindesk, though the matter did not develop past the point of interest.

The probability of large, fresh transactions will increase as the market stabilizes and the volatility of cryptocurrencies drops to acceptable levels. Be it a media channel or exchange, the value of a crypto company is highly dependent on the capitalization of the cryptocurrency market as a whole. As such, any business that admits the possibility of a sale will bide its time in anticipation of better conditions to up the price tag. The first offer made by Vodafone Group to Mannesmann AG hovered in the $70 billion territory. Later, the parties agreed on $180 billion — more than double the original price. There is a high chance that all currently open merger and acquisition offers will swell in accordance with market growth. Between 2020 and 2022, the Bitget exchange received several purchase offers from different companies. Surprisingly enough, those with bigger amounts came from players well outside the cryptocurrency industry. Financial businesses that do not have a cryptocurrency infrastructure are willing to pay serious money for the business.

Despite the numerous risks, potential buyers are well aware of the prospects of significant incomes that can be made on the cryptocurrency market. The result is a growth in the values of the offers, but business owners are in no hurry to sell, keeping in mind the fact that their companies may be worth much more in the near future. Such circumstances set the stage for the largest merger deals that may step outside the historical values recorded in the cryptocurrency industry.

It seems that mergers between cryptocurrency businesses do not entail the threat of centralization, but rather result in the redistribution of market shares and influence. It may also seem that a potential takeover of the largest player in the cryptocurrency market by a representative of a centralized fiat economy carries great risks for all participants in the market. However, in my opinion, such a transaction may well become a proverbial Trojan horse for the entire cryptocurrency industry, marking the countdown to the demise of classical banking and other centralized economic systems.

At the same time, the merger strategy can bring benefits to both sides as the recent Silicon Valley Bank case has shown. For companies that increasingly go bankrupt or face financial problems because of market volatility or a big loan burden, an acquisition deal may be a safety ladder. A recent investment deal between crypto wallet BitKeep and Bitget provided the former with the missing funding necessary to fully cover losses caused by last year’s hacking attack and further strengthen the DeFi wallet’s security infrastructure.