This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.
You’ve heard again and again about the crypto industry “maturing.” More M&A deals are likely to be an ongoing byproduct.
The quarterly number of M&As in crypto is building, reaching a record level during the first three months of 2025. While momentum could snowball from here, the economy’s stability remains a wild card.
There were 62 crypto M&A transactions in Q1, according to advisory firm Architect Partners — up from 59 deals in the final quarter of 2024.
Each of those totals is nearly double that of Q3 2024 (33 deals). The end of 2024, of course, had lots of crypto optimism: Donald Trump’s election win, regulatory progress/promises, a softening SEC, and rising crypto prices.
“I see larger financial players stepping in to add crypto platforms, markets and custodians to their already-diversified financial services offerings, now that the risk of negative outcomes is greatly reduced,” Baker Botts partner Samuel Dibble told me.
During Blockworks’ Digital Asset Summit last month, 10T Holdings CEO Dan Tapiero alluded to an M&A boom coming alongside an expected pick-up in crypto IPOs.
The Q1 crypto M&A activity was unprecedented in more ways than one, noted Architect Partners founder Eric Risley. Aside from the record deal count, there were seven transactions over $100 million and the largest in crypto history: Kraken’s $1.5 billion acquisition of NinjaTrader.
So-called “bridge transactions” — made between crypto and non-crypto companies — will remain a theme going forward, Risley said. The Kraken buy was a bit atypical, given it was a crypto exchange that acquired a traditional foreign exchange and futures business.
The Kraken-NinjaTrader deal also touches on another trend likely to continue — companies seeking out regulatory compliance and licensing.
“NinjaTrader is registered with the CFTC and has a lot of regulatory ‘stamps of approval’ that acquirers see as a fast track to expanding — or simply bolting on — crypto capabilities to their existing businesses,” Dibble noted.
Related to that, Dibble said he expects more non-US companies swooping in to acquire US-licensed operators to quicken business plans in what is now a more attractive market.
“We will see what ultimately unfolds, but I think it has all the signs of being a feeding frenzy,” Dibble noted.
Galaxy Digital CEO Mike Novogratz said on the company’s earnings call last week that a lot of private crypto firms probably want to sell.
“They see [TradFi] companies coming in with big balance sheets,” he noted. “And most crypto businesses, fortunately or unfortunately, are tied to the overall index of crypto prices.”
Indeed, economic uncertainty is the counter to a pro-crypto Trump administration, Risley argued. Crypto price performance has proven to be highly correlated with traditional assets, which have taken a hit given tariff unknowns and even the possibility of a recession. “The state of the global economy matters, and crypto will be buffeted by economic weakness if it develops,” Risley said. “Economically stressed market participants simply withdraw or take less risk.”
He added: “Skew toward optimism. But perhaps not as strongly, as the economic and foreign policy uncertainties have emerged.”
