The long bear market in the crypto sector is driving more and more businesses to grow through mergers and acquisitions. According to a report by CNBC, investors are looking for more and more business opportunities in the blockchain field, even with stagnating or falling crypto prices.
Despite market volatility and the sharp drop in Bitcoin prices, data from investment bank JMP Securities and the PitchBook data portal are clear. As a result, mergers and acquisitions have risen sharply this year compared to previous years.
From the data, it can also be seen that the token values are still more correlated to Bitcoin than to the actual enterprise value. This becomes more understandable when you consider that Bitcoin has been around for about ten years. Bitcoin is, so to speak, the “forefather” of most tokens in the crypto market.
The JMP M & A advisor, Satya Bajpai, told CNBC,
“Bitcoin's token value also depends on outstanding companies. This may be an ideal option for strategic acquirers. “
JMP's data also shows that mergers and acquisitions are becoming increasingly popular with start-ups. To date, over 100 stores have been announced this year that deal with cryptocurrencies and blockchain. By the end of the year, a total of 145 such businesses are forecasted. By contrast, in 2017, despite the all-time high of Bitcoin, only 47 mergers and acquisitions were completed.
Bajpai described the tactics used by most investors as “land grab of talent”. In fact, new acquisitions had employees with experience in the business sector and in terms of blockchain. Due to the high demand such experts are currently difficult to get. As an example, Bajpai referred to the acquisition of Earn.com by the crypto-exchange Coinbase. The founder and CEO of Earn.com became Coinbase's first CTO. In addition, Bajpai said that the users, an important asset for any start-up company, will also be taken on a takeover. Another reason for a takeover may be intellectual property rights, such as ownership of a better-known brand.
Of course, mergers and acquisitions also have their own challenges. Since the whole industry is still relatively young, the valuations of takeover candidates are often not easy. The situation is also complicated for companies that have raised funds through Initial Coin Offerings (ICO). You have to think about how to compensate the investors. The situation is further complicated by another aspect. Many of the young companies are still in the development phase when the tenders are received, and then they have little or nothing to show.
Source: CNBC, Pixabay
Author: Peter Joost – Source Post: https://www.kryptovergleich.org/ma-bis-zu-145-aebernahmen-von-bitcoin-firmen-im-jahr-2018/
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