Crypto winter continues for PwC

2019 is not a golden year for companies in the blockchain and cryptocurrencies. The cabinet PwC even believes that " crypto winter "Continued for part of the year with a drop in fundraising 18%.

The crypto universe continues to develop, with ups and downs. And 2019 has counted a few lows, notes the cabinet PwC. The figures of " Global Crypto M&A and Fundraising Report "Indeed confirm the major trends measured a little earlier by the Blockchain Report.

Capital is no longer as accessible as it once was. 2019 is characterized by a sharp drop in the volume and value of financing transactions and mergers and acquisitions.

A winter of crypto powered by the Covid-19

Covid-19 requires, 2020 is expected to remain on a downward trend. that Bitcoin Whether or not it is recognized as a safe haven after this crisis does not, however, shield the crypto industry from global macroeconomic conditions.

Fundraising and acquisitions are expected to decline by PwC. However in 2019, these operations have already seriously slowed down. The firm believes, for example, that fundraising has decreased 18% with 540 deals, compared to 662 a year earlier. The total amount of funds raised has therefore decreased by $ 3.8-2.2 billion.

Mergers and acquisitions plunged 40% with 119 transactions recorded in 2019. However, the fall in funding is not the only trend observed. PwC also finds a geographic displacement of these investments, a factor which may prove favorable in the long term.

In 2018, the American continent represented 55% of leverage and acquisitions. Asia and Europe now account for more than 50% of these operations. In the long term, France may well have talents, but also funding. The study also noted a diversification of the activities involved in fundraising.

There is increased diversification in the sectors facing investment activity, with a clear shift towards crypto solutions and peripheral sectors, ”writes PwC.

And this trend leads in particular to a decline in mergers and acquisitions in the mining sector.

Big crypto players lead consolidation

In 2018, 28% of deals were in this area. A year later, the share is only 15%. In addition, in many cases, acquirers are increasingly actors from the crypto universe (56% versus 42% in 2018).

According to the authors of the study, this trend reflects a consolidation of the industry. "9 of the first 10 operations were strategic in nature and were led by other crypto companies or crypto funds. "

Consolidation and maturation of the market also translate for investors by favoring companies that have already raised at least one fund. In 2018, the “Seed” represented 71% of the fundraising. Last year, that share dropped to 59%.

The economic recession expected for 2020 could therefore have a harder impact on the sector's start-ups, and help accelerate market consolidation. Binance's acquisition of CoinMarketCap is an illustration of this trend.

We expect further consolidation of the sector with the purchase by some of the large, well-funded or profitable companies from some of the smaller players in the market, ”said PwC.