2022: The Year of Crypto M&A and IPOs?

2021 was an impressive year of crypto exits.

According to Architect Partners, M&A deals involving at least one company in the crypto sector totaled 174 in 2021, compared to 59 deals in 2020.

These included:

• Galaxy Digital’s $1.2 billion purchase of BitGo

• Kraken’s acquisition of Staked

• Polygon’s Acquisition of Mir In $400M Deal

• Northern Data’s $575 million acquisition of Bitfield

• Siam Commercial Bank’s purchase of Bitkub for $537 million

And all signs are pointing to 2022 significantly exceeding 2021. Let’s take a closer look…

M&A in 2022

In 2021, we began to see an increase in M&A between traditional finance and crypto companies such as PayPal buying Curv and Robinhood buying Cove Markets.

This trend is expected to accelerate as traditional companies begin to realize they need more exposure to the space. Not only that, but non-financial companies will begin to pay up for crypto exposure, as highlighted by Nike acquiring NFT company RTFKT.

According to Ryan McCulloch of Architect Partners, he also expects to begin seeing banks partnering or acquiring stablecoin providers as well as data providers. In 2021, Mastercard bought CipherTrace and Cboe Global Markets agreed to buy ErisX to become more competitive.

IPOs in 2022

If 2021 was the year of Coinbase’s IPO, 2022 will be the year of the competitors.

Kraken, which is the fourth largest exchange by volume, has previously raised money at a $10 billion valuation, with secondary shares changing hands at ~$20 billion. CEO Jesse Powell has stated that he hopes the company will go public in the second half of 2022.

FTX, which is the third-largest exchange by trading volume, is profitable and doesn’t necessarily need to go public in 2022, but just may. Recent funding rounds value the company at $32 billion, and the company’s US arm at $8 billion.

Other companies that may bite the bullet include NFT platform, OpenSea, which raised money at a $13.3 billion valuation and wealth management and trading firm, BlockFi, which recently raised $500 million at a $4.75 billion valuation.