Architect Partners LLC, the M&A and strategic financing advisor to crypto, digital asset, blockchain, DeFi and fintech companies, released its Year-End 2023 Global Crypto M&A and Financing Report, the “for analysis into the global activity that is shaping the landscape of crypto dealmaking.”
The research report uncovers “an overall decline in crypto M&A and financing for the year with a cautiously optimistic view for 2024 based on recent improving fundamentals, particularly for companies and participants tied to crypto trading volume and asset prices.”
The research study cites “that following a purge of bad-intentioned market participants in 2022, 2023’s market sentiment was characterized by global regulatory scrutiny, resizing and expense management, building new products and services and rebuilding trust and confidence.”
As we enter 2024, pockets of optimism “have emerged for the crypto sector, with improving crypto asset values and many within the financial services industry transitioning from experimentation to real world implementation of the technology.”
According to the Architect Partners Public Crypto Market Index, publicly traded crypto stock prices had a solid year “driven by positive changes in the crypto environment, experiencing a 247% uptick.”
In comparison, the NASDAQ 100 and S&P 500 rose 43% and 24%, respectively.
Eric Risley, Founder and Managing Partner of Architect Partners, said:
“As we step into 2024, the crypto industry is showing improved fundamentals, especially in trading volume and asset prices, This positive shift is paving the way for management teams to more confidently pursue strategic initiatives through mergers and acquisitions and bolstering investor sentiment. Architect Partners is cautiously optimistic, anticipating a return to healthier market conditions in 2024, contingent on stable regulatory and economic factors.”
Topline findings from the report show:
- M&A activity in Q4 2023 was up modestly from the prior two quarters but remains 30% below the average pace of 2022. Crypto is not alone, broader technology and financial services M&A have similarly suffered reduced activity levels as well.
- Crypto financing activity has been in a persistent decline since Q1 2022. Overall, 2023 deal count fell by 34% from 2022 with capital raised falling by 68%. Similarly, Q4 2023 posted 50% lower proceeds raised and 4% fewer deals compared to the same quarter last year.
- The Developer Tools & Infrastructure and Investing & Trading Infrastructure sub sectors represented 35% of all capital raised in 2023.
Architect Partners also introduces several strategic themes “that will drive industry development in 2024 and beyond. Aside from the much-needed improving sentiment, the report describes the ascendancy of digital financial assets, the shift beyond mere asset value speculation to an investing mindset, and the promise and continued efforts to build the so-called Web3.0 ecosystem.”
Architect Partners maps and navigates trends “within the emerging crypto and digital media ecosystem, delivering thoughtful perspective, insight and guidance to its partners. Architect Insights, a series of weekly reports which features the release of Financing, M&A, and Crypto Public Companies Snapshots, provides actionable insights to empower stakeholders in the cryptocurrency ecosystem, aiding them in discerning valuable opportunities and trends with premium-value decision making guidance.”
To view the Architect Partners Year-End 2023 Global Crypto M&A and Financings Report Report in its entirety, check here.