Mainstream adoption continues! PwC expects more cryptocurrency startups to be acquired by large companies in 2021

According to the latest report from the Big Four accounting firm PricewaterhouseCoopers (PwC), the number of financing deals in the cryptocurrency market has increased by 33% compared to 2019, with the total venture capital funding in the overall market exceeding $3 billion. The institution also predicts that there will be more investment cases in the cryptocurrency industry in 2021.

2020 Cryptocurrency Industry Investment Cases Surge

PwC pointed out in a report that in the first half of 2020, due to the severe impact of the COVID-19 pandemic on the global investment market, the amount of venture capital in cryptocurrency projects sharply decreased by 50%. However, with institutional investors entering the market and the trend of currency inflation driving the bull market in the cryptocurrency market, the venture capital market warmed up again. According to PwC, the average fundraising amount in 2020 increased by 68% compared to 2019.

In addition, the total transaction amount of mergers and acquisitions (M&A) in the cryptocurrency field more than doubled compared to 2019, reaching $1.1 billion.

Among them, Binance and the data analysis website CoinMarketCap had the largest M&A deal in the cryptocurrency field last year, with a total transaction amount of $400 million.

PwC stated that while most trading activities used to occur in the Americas, the market conditions are gradually changing, and trading activities in Europe and Asia are becoming more common.

2021 Will See More Investment Cases

In addition to summarizing the investment case data in the cryptocurrency market, PwC also predicts that the number of mergers and acquisitions in 2021 will further increase. This means that major players in the technology and finance sectors may acquire smaller cryptocurrency companies. For example, earlier this month, PayPal confirmed the acquisition of cryptocurrency custody company Curv for nearly $200 million. The report stated:

"We expect to see more institutional participants entering the cryptocurrency industry in 2021 through investment or acquisitions."

PwC further added that the cryptocurrency field is continuing its institutionalization journey, thanks to central bank digital currencies, decentralized finance (DeFi), and non-fungible tokens (NFTs) attracting institutional investors' interest.