SA国际传媒

After a fast start to the year, M&A deal-making in crypto has hit its own type of 鈥渨inter.鈥�

Earlier this month, one-click checkout company dropped plans to buy crypto and payment infrastructure company for $1.5 billion. The news came just more than three weeks after digital asset investment firm called off its proposed $1.2 billion acquisition of Palo Alto, California-based .

The abandoned deals鈥攚ith about $2.7 billion combined鈥攈elp illustrate what appears to be a cooling M&A landscape as the crypto industry tries to find its level after hitting all-time highs last year.

The market

According to SA国际传媒 , M&A activity targeting VC-backed crypto startups hit an all-time high in the first quarter of the year when 16 were announced. However, deal pace has reverted to barely a trickle, with just seven deals in the last nearly two full quarters.

While deal count has slowed to a drip, there also have not been many large deals. 鈥檚 purchase of the tech assets of blockchain-based payment network 鈥攖he stablecoin originally developed by engineers鈥攆or $182 million is the largest deal involving a VC-backed entity for the year.

Perhaps that should not come as a surprise given the current market conditions. All of the dealmaking announced in the first quarter came just weeks or months after Bitcoin and many cryptocurrencies hit all-time highs in November鈥攚ith Bitcoin itself flirting with $68,000.

Since those heady days, Bitcoin has fallen more than 70% and has frequently traded below $19,000.

Just as investors have abandoned the cryptocurrency market, some venture investors also have slowed the pace of their investment in the sector. Investment in VC-backed crypto companies slowed during the first half of the year and seems unlikely to hit last year鈥檚 high of nearly $19 billion.

M&A deal-making seems to have followed suit, as companies like Bolt and Galaxy Digital had second thoughts on the deals both companies announced in the second quarter to much fanfare before calling them off in Q3.

Looking for a deal

That is not to say that deal flow will continue to be slow or completely stop鈥攊n fact, it could pick up.

It only makes sense for companies that announced deals early in the year to pull out as valuations around the crypto sector have dropped. Those drops in valuations could bring in more buyers as companies and individuals look for a good deal.

CEO has shown he is more than ready to look for possible deals and said in an recent that the exchange giant has at least $1 billion to use on acquisitions and bailouts.

FTX is the front-runner to buy the assets of crypto lender 鈥攚hich filed for bankruptcy in July鈥�.

Crypto exchange giant also has made its intentions in the space clear. During the company鈥檚 Q2 earnings call last month, Coinbase鈥檚 President and COO said the company will continue to be active across both ventures and M&A鈥攁dding that those tools have helped the company gain access to innovation in the crypto ecosystem.

鈥淚t’s an area that has helped us gain access to the innovation happening in the crypto ecosystem,鈥� she said. 鈥淎nd crypto winters we view as builders鈥� markets. It’s often the best time for us to be greedy when others are fearful.鈥�

To see more of our Web3 coverage, visit SA国际传媒鈥檚 Web3 Tracker鈥攁 new site to look at startups, investors and funding news concerning all aspects of Web3, cryptocurrencies and blockchain.

Illustration: Dom Guzman