Galaxy Digital: The collapse of the crypto market opens up opportunities for mergers and acquisition
According to the top manager of Galaxy Digital, the collapse of the crypto market may be a good moment for mergers and acquisitions
"In general, there is much more receptivity to the idea of mergers and acquisitions in the current market environment," said Michael Ash, head of Galaxy's investment banking division
It is noteworthy that usually a downturn in the market leads to a reduction in mergers and acquisitions, as well as initial public offerings. According to Ash, the recession forced some participants to think more seriously about the possibility of acquiring:
"The severe closure of capital markets has forced companies to reconsider their strategic goals. As part of this, many are considering acquisitions and even moving towards mergers and acquisitions in situations where they have not considered selling"
The collapse of the crypto market has complicated liquidity problems for some firms: from lenders like Celsius and Voyager, to funds like Three Arrows Capital. Against this background, the crypto-lender Nexo agreed to acquire the Singaporean competitor Vauld. FTX company.US has also announced plans to acquire BlockFi. The head of Binance, Changpeng Zhao, is considering from 50 to 100 transactions in the field of investments and acquisitions.
"We expect that there will still be distressed assets, as companies are running out of capital. As for potential buyers, I expect that private investment companies will use distressed assets as a means of entering the crypto sector," Ash believes.
Data from the consulting company Architect Partners show that in the first half of 2022, the mergers and acquisitions market was at the peak of popularity and activity surpassed last year's record pace. However, the company believes that market volatility may lead to a decrease in this activity.
According to the company, exchanges, exchange infrastructure, mining and the data sphere remain the most mature subsectors of the crypto industry, and it is expected that by the end of 2022 they will experience the greatest activity in the field of mergers and acquisitions.
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