In a recent strategic business maneuver, Securitize, an established institution in the field of tokenizing private investments, has embarked on a mission to acquire the cryptocurrency investment platform, Onramp Invest. This merger, influenced by the daunting financial climate within the crypto markets, is a testament to the finely woven business connections between the two firms as well as a reflection of the current convolution within the crypto fundraising sphere.
Executing this merger will afford Registered Investment Advisors (RIAs) the opportunity to tap into a plethora of alternative asset classes, spanning from private equity to private credit, under Securitize’s well-diversified portfolio. Carlos Domingo, CEO of Securitize, spotlighted the acquisition’s expansive implications, aligning primarily with the objective to democratize the private capital markets whilst expanding access to high-yielding alternative assets.
Astoundingly, this groundbreaking merger surfaces in an era laden with a remarkable downtrend in crypto sector-related merger and acquisition (M&A) activity, a microcosm of the global trend. Reportedly, the first half of the past year unsurprisingly experienced a sluggish growth in deal-making activities. Down to the finer details, data from Refinitiv revealed a worrying 38% plunge in global M&A in the latter half of the year 2023, as opposed to the equivalent period in the previous year. This downward spiral of M&A navigated its way to the US, witnessing a monetary decline by 41% alongside a 5% descent in deal volume.
Unexceptionally, crypto behemoth Galaxy Digital fell prey to this stark M&A slowdown, with investment banking business revenue freefalling to an underwhelming figure of $45,000. Consequently, this deceleration of M&A and capital-raising activities reverberated ominously throughout their financial standing.
Currently, the substandard deal-making rhythm persists into the sizzling summer months, with August bearing witness to below-average capital influx alongside remarkably smaller deal sizes—a facet mirroring consequent trends spotted in July, as noted by advisory firm Architect Partners.
While the Securitize and Onramp merger is considered by many to be a sound business strategy, it’s impossible to ignore the wider implications it stands as an enduring symbol of—the persistent and perplexing state of the crypto markets, and most notably, the pressing question of the future of M&A within the cryptocurrency sphere.
Source: Cryptonews
