Crypto Mergers and Acquisitions are defining the Blockchain space by facilitating market growth, relevance, and a means for crypto companies to enter the mainstream environment.
The Blockchain probably is the most dynamic segment in the tech world at the moment. This could be so because this novel technology has aroused a lot of though and action at the same time. Or, it could be that because it is something new, a lot of trial and error is the preferred Modus Operandi. Either way, a lot is happening in this space.
The latest in a spate of events, or challenges has been the duplicity in functionality following the release of almost 2000 cryptocurrencies in the era of ICOs that stretched between 2016 and 2018. To solve this mess and create some semblance of order, crypto mergers has been a common thing in the recent past.
Mergers are a common aspect of business. Crypto mergers are no different. In essence, a crypto merger is a lot like your ordinary merger and acquisition; either joining two entities to become one or in the case of acquisition, one entity taking over the affairs of another and in the process creating on considerably bigger entity.
The Total Business Worth of Crypto Mergers and Acquisitions
In fact, crypto mergers are so big that according to the Circle Research Crypto Retrospective released by Circle, a global crypto finance company, merges focusing on Blockchain projects is set to increase by more than 300% year-on-year.
These statistics point to a trend that is worth noting; the many cryptocurrency exchanges that are now going after publicly-traded non-crypto firms. In the real sense of the word, such kind of an arrangement is called a reverse merger. In such a setting, a crypto company chooses to snap a publicly-held company in order to bypass the often time-intensive and complex IPO process.
At a time when most crypto companies are seeking public listing, this arrangement offers immense convenience.
To put this into context, it probably is best to highlight the benefits of this process especially in light of the crypto companies.
Benefits of Mergers and Acquisitions to Crypto Companies
Access to Synergistic Technology
Crypto companies and their platforms came bearing many promises. In fact, the rosy language was the reason raising venture capital through the ICOs was easy.
Over time, however, a realization that a lot more than just rosy language is necessary for the companies to achieve their objectives is setting in. Aside from the acquisition spree seen among cryptocurrency exchanges, there are numerous other examples of companies snapping their mainstream counterparts to take advantage of their products and improve the element of the crypto platforms.
Take Tron, for instance, which bought BitTorrent in 2018 to make the most of the advocate of internet decentralization and especially its decentralized peer-to-peer file sharing service to better Tron’s provisions. Tron’s move was futuristic because soon, decentralized platforms will be the key focus in improving and ensuring data privacy among internet users.
Increasing User Base and Network Exposure
After the cryptocurrency winter, many deals in the space now look towards establishing networks, increasing exposure and adding market share.
In the example of the transaction given above, by buying BitTorrent, Tron not only gained the platform’s peer-to-peer file sharing service, it also got BitTorrent’s networked user base.
Many crypto companies that are pursuing crypto mergers and acquisition end up with increased activity. This is characteristic of industry players that are hungry for the essential network effect, expansion of market share, and accelerating the expansion of their user bases.
Easier Global Expansion for Crypto Companies
Beyond increasing relevance among a local audience, many companies have pursued crypto mergers and acquisition to gain a foothold of new markets. Because of the complex and diverse regulations in the business world, mergers are a rapid method of accessing new international markets.
Take Kraken, for instance, which in February 2019 acquired Crypto Facilities. In acquiring the UK registered exchange, it was able to bypass the strict demands of the Financial Conduct Authority of the UK and thus, a soft landing into a lucrative market.
Better still, Kraken now offers more indexed and future securities to its international clients due to this arrangement with Crypto Facilities. The same applies to Coinbase that acquired Neutrino in the same month of the Kraken transaction. Because of the deal, Coinbase now has an expanded user base in Europe, and it can offer its products incompliance with the new market because Neutrino already is in compliance.
What is the Role of Cryptocurrency Mixing in these Deals?
The deals described above often bring together two or more teams together. Though the teams may be pursuing a common goal, you cannot guarantee that their overall business intentions are in harmony.
As a precaution, business transactions of these magnitudes involve banks and their complex procedures of transferring cash. However, there are bits of payments that may involve peer-to-peer transfers. In such situations, cryptocurrencies, and Bitcoin, in particular, offer a convenient mode of transferring value.
If you opt to use a cryptocurrency, and considering that it is advisable to keep your transactions private so the other parties on the table are not privy of your finances, cryptocurrency mixing is the safest way to transact.
While the process of mixing crypto in transactions of this magnitude may be taxing, it still is safe to use a mixer rather than expose your transactions to individuals and parties that you are just beginning to get acquainted with.
The era of Blockchain enterprise is here and the dynamics of the space is such that realignment is the order of the day. As crypto mergers and acquisitions define where the space will move next, usual caution should not be thrown out the window. If anything, with the increase in M&A, so should be the heightened vigilance in time of completing transactions. Granted, usual mergers may not necessarily mean money exchanging hands in the traditional way. But where it does, and crypto is the medium of exchange, then mixing must be considered.