Cryptocurrency M&A has come far. The newest market players offering investors the capacity to trade in crypto indicate that the fiat store of value is creeping closer toward mainstream, as retirement funds allow plan participants to bet on Bitcoin. That could mean more fuel for M&A fires sweeping up cryptocurrency infrastructure assets.
Fidelity Investments’ announcement last week that it will allow individuals to invest in cryptocurrency potentially stokes additional interest in industry consolidation. Consider the possibilities for Bitcoin infrastructure M&A. A growing roster of early adopters holding crypto directly in corporate treasuries include MassMutual, MicroStrategy, and Tesla. These companies’ willingness to transact with customers directly in Bitcoin potentially creates a new market in services for the banks that service them, few of which have made the move to facilitating crypto thus far. Bank of New York Mellon is among the outlying large financial institutions to announce plans to offer crypto accounts.
BNY Mellon is already acquiring its own way to proficiency: its crypto build-out will be facilitated by its acquisition of a stake in crypto storage platform Fireblocks. The $133 million funding round announced last year values Fireblocks at $1 billion.
If this buy-and-build strategy sounds familiar, it’s because payments companies have been chasing digital assets for some time now. Remember Visa Inc. and Mastercard Inc.’s bidding war for Ripple-affiliated payments processor Earthport back in 2019? The difference now is the players: should traditional financial institutions join the fray, competition for crypto infrastructure is likely to stiffen.
Add that to parallel M&A strategies for digital currency exchanges, and this could be a frothy year for deals.
–Brandon Zero
