The crypto and blockchain industries have recently been experiencing the highest levels of M&A activity. This wave comes on the heels of a remarkable drop in venture capital funding. Just last week Coinbase announced the acquisition of Deribit for $2.9 billion — one of the largest M&A transactions in the history of cryptocurrency. This acquisition is part of a budding M&A trend, as companies are increasingly looking to M&A to build capabilities and market presence.

Venture capital has experienced a shocking drop of more than 70% from its peak in 2021. This drastic decline has created an environment ripe for an explosion in mergers and acquisition (M&A) activity. Even though the financial environment is tightening, companies have suffered through very difficult market conditions. Consequently, many are finding it appealing to buy out already established companies and technologies as opposed to developing assets organically. The average crypto M&A deal size, however, has experienced an unprecedented jump. It increased from $25 million in 2022 to $64 million in 2025.

Coinbase's Strategic Acquisition of Deribit

Coinbase’s rumored purchase of Deribit is both an opportunistic play to bolster its technological capabilities and expand its team. As a result, the acquisition brings some of the elite zero-knowledge researchers and engineers out there into Coinbase’s fold, strengthening the company’s expertise in this critical area. Coinbase has a very public track record of making value-adding acquisitions that continue to serve as growth drivers for Coinbase itself. By bringing Deribit’s team into its product and machine learning divisions, Coinbase will boost its extensive artificial intelligence (AI) undertakings.

Coinbase’s acquisition is an early example of the trend that is heating up in the crypto space. Firms such as Ripple and Kraken are similarly seeking out mergers and acquisitions to achieve strategic advantage. These motivations may include broadening distribution and achieving access through regulation, as well as increasing options volume and bridging product gaps. With the purchase of Deribit, Coinbase will increase its competitive market share. This joint effort will position all of them to present a broader, more collaborative suite of services to their collective clients.

The Rise of Crypto M&A Activity

Figure 1 below shows the record level of M&A activity in the overall crypto industry. The surge in M&A begins around 2020. This trend was most extreme in 2022, both in terms of number and total value. Notable examples of M&A activity in the crypto space include Yearn's M&A season, OpenSea's acquisition of Dharma, and FTX's acquisitions prior to its collapse. These agreements highlight the increasing acceptance of M&A as a means of aggressive, strategic growth and consolidation throughout the industry.

Four major factors are fueling the M&A frenzy. The maturation of the entire crypto market, the increasing sophistication of technology, and the need for companies to differentiate in a congested space are all leading to this development. As a result, VC funding is increasingly difficult to come by. In reply, firms are increasingly engaging in strategic mergers and acquisitions to acquire the brainpower and know-how critical for their prosperity.

Historical Parallels and Future Outlook

This new wave of M&A activity in the crypto industry is reminiscent of past waves seen in the traditional financial sector. The conventional financial sector has already seen five or six seismic waves of mergers and acquisitions. In hindsight, these waves were fueled by a perfect storm of deregulation, economic growth, easy money and technology disruption. These waves of consolidation have changed the financial landscape, making for some large and in some cases, over-diversified institutions.

The second wave of crypto M&A is capital-driven, with protocols like Uniswap, Matic (now Polygon), and Yearn Finance, as well as companies like Binance, FTX, and Coinbase, finding product-market fit (PMF). This new wave is marked by companies leveraging their deep pockets to identify and purchase complementary businesses and technologies. As in the broader markets, M&A deals in the crypto industry rarely deliver on the hype. For all their strategic intent, most of these deals miss the mark.

"We are in the midst of a new wave of M&A in crypto." - Foresight News

Bitcoin hit its all-time high in November 2021. Crypto mergers and acquisitions soared to record highs in 2022, signaling a lag in private markets’ response to shifting liquid markets. In 2022, protocols and companies, notably Polygon, invested close to $1 billion acquiring zk proof-related projects.

"This is an era of strategic exit." - Author：Foresight News