There has been significant growth in cryptocurrency-related fundraising and merger and acquisition activity across Asia this year, showing the broader expansion and maturation of the digital-currency sector in the region.
While most crypto deals took place in the Americas last year, 2019 has seen activity being driven by Asia-Pacific, the Middle East, Africa and Europe, according to a recent report published by PwC.
Among the 125 deals that occurred in the first six months of this year, 58% were in the Asia-Pacific, the Middle East and Africa, with 41% in the Americas. However, in the first half of last year, the Americas represented 60% of activity, compared with 50% for Asia-Pacific, the Middle East and Africa.
Cryptocurrency fundraising in the Asian market has risen significantly and accounted for 26% of deals in the second quarter of 2019.
Furthermore, a similar trend has been reported in terms of mergers and acquisitions. The US market’s dominance declined from more than 80% in the first half of 2018 to just 48% in the second quarter of this year.
In contrast, the combination of M&A activity in Asia and Europe increased from 17% early last year to more than 50% currently.
Taken as a whole, this would signal that the cryptocurrency sector is growing at a considerable rate, in Asia and indeed across the world. This is backed up by research.
According to a report by CB Insights, total market capitalization of cryptocurrencies has doubled over the past nine months amid heightened corporate and institutional interest.
As such, we can expect further substantial expansion of the cryptocurrency sector, predominantly due to large inflows of institutional investors. Governments, financial institutions, major corporations, universities and well-known investors will bring their institutional capital as well as knowledge, experience and expertise to the crypto-verse.
Although the cryptocurrency market has been on this track for some time, there is a growing sense that institutional investors are getting ready to move off the sidelines before the end of this year and in the early part of 2020.
As well as being borderless, making cryptocurrencies perfectly suited to the world of business, trade and people, they are also ideally matched to increasing levels of global digitization. We’re witnessing a growing sense of recognition around the world that digital currencies are the future of money. Cryptocurrencies are very much here to stay.
As this recent PwC report indicates, the major growth in the cryptocurrency industry in Asia, and indeed globally, highlights that cryptocurrencies, particularly Bitcoin – the largest digital currency by market capitalization – are increasingly part of mainstream finance.
Nigel Green is founder of deVere Group, an independent financial advisory organization.