- New regulatory heads and deregulation is expected to spur a flurry of deals.
- Stripe's acquisition of Bridge is a sign of things to come, say analysts.
- Crypto is on course for its first proper season of M&A.
Here come the deals.
With President-elect Donald Trump signalling a wave of financial deregulation under new department heads in his term, analysts forecast a surge in crypto industry acquisitions in 2025.
It doesn’t hurt that Trump, who has embraced crypto and pledged to make the US a Bitcoin hotbed, is poised to oust regulators such as Gary Gensler who have cracked down on the industry.
Crypto-friendly
“There is no question that a crypto-friendly administration will accelerate the pace of mergers and acquisitions in the space,” Michael Ashe, Galaxy Digital’s head of investment banking, told DL News.
“With the availability of capital, which we expect will come, acquirers are likely to take a more risk-on approach from a dealmaking perspective.”
In contrast to the Biden Administration, Trump’s laissez-faire bent toward finance is triggering a more than 20% surge in the price of Bitcoin.
‘The three areas that we are focused on at Galaxy are tokenisation, stablecoins and custodians.’
— Michael Ashe, Galaxy
The stocks of Wall Street banks such as JPMorgan Chase, Goldman Sachs, and Citigroup are also rallying as investors wager they’ll be less restricted in a range of businesses, including advising and financing mergers and acquisitions.
At the same time, the valuations of companies involved in deals are also climbing.
Shares in Capital One and Discover, for example, both jumped after Trump’s victory on November 5.
Capital One’s $35 billion acquisition of Discover has idled since February as several agencies, including the Office of the Comptroller of the Currency, scrutinised the transaction.
Trump is expected to replace OCC head Michael Hsu in January.
Gensler, the chair of the US Securities and Exchange Commission, is also expected to resign soon.
This shift appears to augur something new for crypto — a proper season of heavy M&A action. Put another way, stronger ventures are about to acquire weaker ones at attractive valuations in an industry that has experienced meagre deal activity over its 15 year history.
Ripe sectors
Now the question is where? What sectors might be reshaped by crypto dealmaking?
“It is hard to pin down which niches within crypto look the most attractive for consolidation given the pace at which the space moves,” Ashe told DL News. “The three areas that we are focused on at Galaxy are tokenisation, stablecoins and custodians.”
In October, Stripe, the US-Irish fintech giant, acquired Bridge, a stablecoin infrastructure provider, for $1.1 billion.
More deals like this one are coming, said Eliézer Ndinga, head of business development at investment firm 21.co.
“Existing payment processors need to be upgraded,” he told DL News.
“Acquisition and venture capital activity is going to increase significantly for how to build the best developer toolings for existing fintechs and banks.”
Liam Kelly is DL News Berlin-based DeFi Correspondent. Got a tip? Email at liam@dlnews.com.
