Rising Activity in the Digital Currency Sector
Dealmaking in the digital currency sector is thriving, driven by robust industry growth, political support, and favorable regulations.
In the United States, indications suggest that cryptocurrency is on the verge of a prosperous phase after a time of stringent regulatory measures. President Donald Trump’s anticipated second term is seen as a pivotal moment for the industry, with promises to halt the recent regulatory crackdowns on cryptocurrency. Bitcoin, for instance, hit an all-time high of approximately US$109,000 in late January, increasing over 50 percent since Trump’s election victory. While it experienced a downturn afterward, the cryptocurrency was valued at US$90,167 by late April—up 35 percent compared to the previous year.
Prior to this, the cryptocurrency market was already witnessing significant growth. The U.S. market is projected to grow from US$9.8 billion in 2024 to US$29.8 billion by 2033, fueled by technological advancements, heightened public interest, and increased institutional adoption.
Comparable Growth in Europe
Europe mirrors the U.S. growth trend, with projections indicating that the European cryptocurrency market will expand from US$6.9 billion in 2024 to US$27.6 billion by 2033, supported by favorable regulatory frameworks. Notably, the European Union’s “Markets in Crypto-Assets” legislation, effective at the end of 2024, aims to bring order to the chaotic crypto-assets environment.
Transaction Data and Market Dynamics
Across both the U.S. and Europe, deal activity in the technology and financial services sectors has seen strong growth in 2024 and the early months of this year, driven by ongoing digitalization and competitive pressures for innovative consumer services. The financial sector recorded significant year-on-year growth in total deal value as companies sought the latest digital solutions.
Positive market dynamics led to a significant rise in cryptocurrency deals in the U.S. and Europe in 2024. According to Mergermarket data, there were 93 deals amounting to US$4.1 billion last year—a 2.5-fold increase in value and a 19 percent rise in volume compared to the previous year. The U.S. accounted for most of this growth, with 45 crypto deals valued at over US$3.2 billion, nearly five times the total from 2023. Meanwhile, EMEA recorded 48 transactions—a slight increase from the previous year—though total value fell by 5 percent to US$918 million.
Future Expectations and Drivers
The first quarter of 2025 has shown strength despite challenges in the broader M&A market, featuring 23 deals worth US$655 million. Europe led with 12 deals totaling US$348 million, representing year-on-year increases of 9 percent and 21 percent, respectively. Conversely, U.S. dealmaking slowed, with 11 transactions totaling US$307 million, showing declines of 26 percent and 66 percent year-on-year.
Challenges in M&A and Market Dynamics
Dealmakers aim to leverage the still-developing regulatory landscape in crypto before a more structured framework is established, which could encourage short-term M&A activity. However, the market’s relative immaturity presents its own challenges, such as the infrequency of M&A activities, which complicates deal-making processes. Additionally, the volatility inherent in token markets distinguishes crypto transactions from traditional M&A, requiring unique approaches due to the complexities associated with ownership models.
Looking Ahead
With supportive governmental policies fostering change, the intersection of fintech and cryptocurrency stands to be a significant trend as we progress into 2025. Financial institutions and payment companies are seeking greater efficiencies in their digital services, while emerging crypto firms will pursue mergers and acquisitions to gain competitiveness in the market. These forces have the potential to reshape the landscape quickly, with M&A playing a crucial role in this transformation.
