Originally Posted by: Saurabh Deshpande
Original translation: Luffy, Foresight News
Coinbase acquires Deribit for $2.9 billion, the largest MA event in cryptocurrency history.
The same is true of history in the tech space. Google has acquired 261 companies to date. These acquisitions gave rise to products such as Google Maps, Google AdSense, and Google Analytics. Perhaps the most significant of these was Google’s acquisition of YouTube in 2020 for $1.65 billion. In the first quarter of 2025, YouTube generated $8.9 billion in revenue, accounting for 10% of Alphabet’s (Google’s parent company) total revenue. Similar to Google, Meta has made 101 acquisitions to date. Instagram, WhatsApp, and Oculus are prominent examples. Instagram generates more than $65 billion in annual revenue in 2024, accounting for more than 40% of Meta’s revenue from all businesses.
Should I buy one ready-made, or build my own?
The cryptocurrency industry is no longer a new industry. It is estimated that the number of cryptocurrency users has reached 659 million, Coinbase has more than 105 million users, and the global Internet users are about 5.5 billion. So, cryptocurrency users have reached 10% of the total Internet users . These numbers are important because they help us determine where the next stage of growth will come from.
Increasing the number of users is an obvious way to grow. Currently, we have only developed use cases for cryptocurrencies in the financial sector. If other applications use blockchain technology as infrastructure, the entire market size will expand significantly. Acquiring existing users, cross-selling, and increasing revenue per user are some of the ways that existing companies can achieve growth.
When the pendulum swings toward acquisitions
Acquisitions solve three key problems that financing alone cannot. First, acquisitions help with talent acquisition in highly specialized fields where experienced developers are scarce. Second, acquisitions help with user acquisition in an environment where organic growth is increasingly expensive. Third, acquisitions can facilitate technology integration, allowing protocols to move beyond their original use cases. These issues will be further explored in the following article with industry examples.
We are in the midst of a new wave of MA in crypto. Coinbase acquired Deribit for a record $2.9 billion; Kraken acquired NinjaTrader, a retail futures trading platform regulated by the US Commodity Futures Trading Commission (CFTC), for $1.5 billion; and Ripple acquired multi-asset prime broker Hidden Road for $1.25 billion, having also made a bid for Circle that was rejected.
These deals reflect the changing priorities in the space. Ripple wants distribution and regulatory access, Coinbase is after options volume, and Kraken is filling a product gap. These acquisitions are all driven by strategy, survival, and competitive positioning.
The table below can help you understand the thinking of existing companies when considering whether to build or acquire.
While the table summarizes the key trade-offs in the build vs. buy decision, incumbents often rely on unique signals when making decisive moves. A good example is Stripe’s acquisition of Paystack in Nigeria in 2020. Building infrastructure in Africa means facing a steep learning curve in terms of regulatory details, local integrations, and merchant onboarding.
Stripe chose to acquire. Paystack had already solved local compliance issues, built a merchant base, and demonstrated its distribution capabilities. Stripes acquisition met multiple criteria, such as speed (gaining first-mover advantage in a growing market), capability gap (local expertise), and competitive threat (Paystack becoming a regional competitor). This move accelerated Stripes global expansion without distracting from its core business.
Before we dive into why deals happen, it’s worth considering two questions: first, why founders should consider being acquired, and second, why now is an important time to consider it.
Successful acquisitions can be a booster
Why is the current macro environment favorable for acquisitions now?
For some, it’s about liquidity at exit. For others, it’s about tapping into more durable distribution channels, securing long-term growth, or being part of a platform that can amplify impact. And for many, it’s a way to sidestep the increasingly narrow path to venture capital, now more scarce than ever, with investor expectations higher and timelines tighter.
A rising tide does not lift all boats
The venture capital market lags the liquid market by several quarters. Typically, whenever Bitcoin prices peak, it takes months or quarters for venture capital activity to cool down. Venture capital in the crypto space is down over 70% since the 2021 peak, and median valuations are back to 2019-2020 levels. I don’t think this is a temporary pullback.
Let me explain why. In short, VC returns have fallen, while the cost of capital has risen. So there is less VC money chasing deals because the opportunity cost is higher. But for reasons specific to the crypto space, the market structure has been affected by the massive growth in the number of assets. I keep an eye on this chart, and most token businesses should be aware of it. Issuing a new token just because it is easy is probably not a smart move. There is a finite amount of capital on the internet. With every new asset issued, there is less liquidity chasing it, as shown in the chart below.
Every venture-backed token that launches with a high fully diluted valuation (FDV) requires a lot of liquidity to reach a multi-billion dollar market cap. For example, EigenLayers EIGEN token launched at $3.9 with a fully diluted valuation of $6.5 billion. The circulation at launch was about 11% and the market cap was about $720 million. The current circulation is about 15% and the fully diluted valuation is about $1.4 billion. After multiple rounds of unlocking, 4% of the supply has entered circulation since the initial token issuance. The token price has fallen by about 80% since launch. To get back to the launch valuation, the price needs to increase by 400% with an increase in supply.
Unless the tokens actually accrue value, there is no reason for market participants to chase them, especially in a market with a plethora of investment options. Most of these tokens will likely never reach their original valuations again. I looked at the 30-day revenue of all projects on Token Terminal, and only three projects (Tether, Tron, and Circle) have monthly revenues exceeding $1 million. There are only 14 projects with monthly revenues exceeding $100,000. Of these 14 projects, 8 have tokens, which means they have investment value.
This means that individual investors either cannot exit or must exit at a certain discount. The overall poor performance of the secondary market has put pressure on the return on investment of venture capital. This will lead to more cautious investment strategies. Therefore, products must either find product-market fit (PMF) or must be new things that we have not tried yet in order to attract investors and get a valuation premium. A product with only a minimum viable product (MVP) and no users is difficult to find investors. So, if you are building another blockchain extension layer, the possibility of you getting favored by good investors is low.
We are already seeing this happening. As we mentioned in our Venture Capital Tracker article, monthly venture capital inflows into the crypto space have fallen from a peak of $23 billion in 2022 to $6 billion in 2024. Total funding rounds have fallen from 941 in Q1 2022 to 182 in Q1 2025, indicating a cautious approach by VC funding.
Why now?
So what happens next? Acquisitions may make more sense than new rounds of funding. Protocols or businesses that already have some revenue will chase niches that can fill their blind spots. The current environment is pushing teams toward consolidation. Higher interest rates make capital expensive; user adoption has plateaued, so organic growth has become more difficult; token incentives are not as effective as they used to be; and at the same time, regulation is forcing teams to professionalize faster. All of these factors are driving the crypto space to use acquisitions as a means of growth. This time around, MA activity in the crypto space seems more deliberate and focused than in previous cycles. We’ll explore why later.
MA cycle
Historically, the traditional financial sector has experienced five or six major waves of mergers and acquisitions, which were triggered by factors such as deregulation, economic expansion, cheap capital, or technological change. Early waves were driven by vertical integration and monopoly ambitions; later waves emphasized synergies, diversification, or global influence. We don’t need to study the century-long history of mergers and acquisitions in detail. Simply put: when growth slows and capital is abundant, integration accelerates.
Source: Harvard Law School Corporate Governance Forum
What explains the different phases of MA in the cryptocurrency space? It’s similar to what we’ve seen in traditional markets for decades. Growth in emerging industries tends to come in waves, not straight lines. Each wave of MA reflects a different need in the industry’s maturity curve: from building a product, to finding product-market fit, to acquiring users, and locking in distribution channels, compliance, or defensibility.
Source: CBInsights
We saw this in the early days of the Internet and in the mobile Internet era. Recall that in mid-2005, Google acquired Android. This was a strategic bet that mobile devices would become the dominant computing platform. According to the book Androids: The Team That Built the Android Operating System by Chet Haase, a veteran Android engineer and Google employee:
In 2004, 178 million PCs were shipped worldwide. During the same period, 675 million mobile phones were shipped, nearly four times the number of PCs, but with processors and memory comparable to those of 1998 PCs.
The mobile operating system market was once fragmented and limited. Microsoft charged licensing fees for Windows Mobile, Symbian was mainly used on Nokia devices, and BlackBerrys operating system only ran on its own devices. This created a strategic opportunity for the development of open platforms.
Google seized on the opportunity and acquired a free, open-source operating system that manufacturers could adopt without having to pay expensive licensing fees or build their own operating system from scratch. This democratized approach allowed hardware manufacturers to focus on their strengths while tapping into a sophisticated platform that could compete with Apple’s tightly controlled iOS ecosystem. Google could have built an operating system from scratch, but acquiring Android gave it a head start and helped counter Apple’s growing dominance. Twenty years later, 63% of web traffic comes from mobile devices, with 70% of mobile web traffic generated through Android. Google anticipated the shift from PCs to mobile devices, and acquiring Android also helped Google dominate mobile search.
The 2010s were dominated by deals related to cloud infrastructure. Microsoft acquired LinkedIn for $26 billion in 2016, a move designed to integrate identity and professional data across Office, Azure, and Dynamics. Amazon acquired Annapurna Labs in 2015 to build its own custom chips and provide edge computing capabilities for AWS, demonstrating that vertical integration of infrastructure is becoming critical.
These cycles occur because each stage of industry development brings different constraints. Early on, it was about speed to market. Later, it was about acquiring users. Eventually, regulatory clarity, scalability, and staying power became key. Acquisition is how industry winners compress timelines, buying licenses instead of applying, acquiring teams instead of hiring, and buying infrastructure instead of building from scratch.
So, the pace of MA in the cryptocurrency space echoes what’s happening in traditional markets. The technology is different, but the common sense is the same.
Three Waves of Crypto MA
If you think about it, MA in the cryptocurrency space has gone through three distinct phases. Each phase was determined by the market demand and technology conditions at the time.
The first wave (2017-2018) — ICO wave: Smart contract platforms were just emerging, decentralized finance (DeFi) did not exist at the time, and people only wanted to build on-chain applications that could attract users. Exchanges and wallets acquired smaller front-end platforms to attract new token holders. Notable transactions of this era include Binance’s acquisition of Trust Wallet and Coinbase’s acquisition of Earn.com.
The second wave (2020-2022) - Capital-driven acquisitions: Some protocols like Uniswap, Matic (now Polygon), and Yearn Finance, as well as companies like Binance, FTX, and Coinbase, have found product-market fit (PMF). In the bull run of 2021, their market capitalizations soared, and the tokens they held were overvalued and available for spending. The protocols decentralized autonomous organization (DAO) used governance tokens to acquire related teams and technologies. Yearns MA season, OpenSeas acquisition of Dharma, and FTXs crazy acquisitions before its collapse (such as the acquisition of LedgerX and Liquid) defined this era. Polygon also made ambitious acquisition moves, acquiring teams such as Hermez (zero-knowledge proof expansion solution) and Mir (zero-knowledge technology) to establish its leading position in the field of zero-knowledge expansion.
The third wave (2024-present) - Compliance and Scalability: With tighter venture capital and clearer regulation, well-funded companies are snapping up teams that can bring regulated venues, payment infrastructure, zero-knowledge technical talent, and account abstraction primitives. Recent examples include Coinbases acquisition of BRD Wallet to strengthen its mobile wallet strategy and user onboarding, and it also acquired FairX to accelerate its push into the derivatives field.
Robinhood acquires Bitstamp to expand its business to other regions. Bitstamp has more than 50 valid licenses and registrations worldwide, which will bring Robinhood customers from the EU, UK, US and Asia. Stripe acquires OpenNode to deepen cryptocurrency payment infrastructure.
Why did the acquirer acquire?
Some startups are acquired for strategic motivations. When an acquirer initiates a deal, they often want to accelerate their own roadmap, eliminate a competitive threat, or expand into new user groups, technology areas, or geographies.
For founders, becoming an acquisition target is not just about getting a return, but more about achieving scale and business continuity. A well-planned acquisition can bring the team greater distribution channels, long-term resource support, and the ability to integrate the product into the broader ecosystem they are trying to improve. Rather than working hard for the next round of financing or transforming the business to catch the next wave, becoming an acquisition target may be the most effective way to achieve the original mission of the startup.
Here’s a framework to help you assess how close your startup is to being a “right acquisition target.” Whether you’re actively considering the acquisition path or are simply building your business with acquisition possibilities in mind, excelling on these parameters will significantly increase your likelihood of being noticed by the right acquirer.
Four Models of Cryptocurrency Acquisition
When examining major deals over the past few years, we’ve seen some clear patterns emerge in the structure and execution of these acquisitions. Each pattern represents a different strategic focus:
1. Talent acquisition
Vibe coding is here, but teams need skilled coders who can build products without relying on AI. We are not yet at a point where we can write code with AI and spend millions of dollars with confidence. So acquiring small startups to get talent before they become a threat is indeed a reasonable reason for incumbents to acquire startups.
But why do talent acquisitions make sense from an economic perspective? First, the acquirer typically acquires relevant intellectual property, a continuing product line, and an existing user base and distribution channels. For example, when ConsenSys acquired Truffle Suite in 2020, it not only absorbed a development tool team, but also acquired key intellectual property, such as Truffles development tool suite, including Truffle Boxes, Ganache, and Drizzle.
Second, talent acquisitions allow existing companies to quickly integrate specialized teams, often at a lower cost than building a team from scratch in a competitive talent market. As far as I know, there are only about 500 engineers who truly understand zero-knowledge technology in 2021. This is why Polygons acquisition of Mir Protocol for $400 million and Hermez Network for $250 million makes sense. Hiring these zero-knowledge cryptographers alone would likely take years, assuming they are available.
Instead, these acquisitions bring elite zero-knowledge researchers and engineers into Polygon’s team overnight, streamlining the hiring and onboarding process at scale. The total cost of such acquisitions is economically efficient compared to the time it takes to hire, train, and ramp up people, especially when the acquired team is already launching a product.
When Coinbase acquired Agara for $40-50 million in late 2021, the deal was more about acquiring engineering talent than customer service automation. Agara’s India-based team had deep expertise in AI and natural language processing. After the acquisition, many of these engineers were integrated into Coinbase’s product and machine learning teams to support its broader AI efforts.
While these acquisitions were framed as technology, the real assets were talent: engineers, cryptographers, and protocol designers who could realize Polygon’s vision for a zero-knowledge future. While the full integration and productization of these teams took longer than expected, these acquisitions gave Polygon a deep bench of zero-knowledge technical talent, a resource advantage that continues to shape its competitive strategy to this day.
2. Capabilities/Ecosystem Expansion
Some strategic acquisitions focus on expanding ecosystem coverage or internal team capabilities. The acquired company’s positioning and market visibility often help achieve this goal.
Coinbase is a great example of the ability to expand through acquisitions. It acquired Xapo in 2019 to expand its custody business. This laid the foundation for Coinbase Custody, which provides secure, compliant storage solutions for digital assets. The acquisition of Tagomi in 2020 prompted Coinbase to launch Coinbase Prime, a comprehensive suite of institutional trading and custody services. The acquisition of FairX in 2022 and Deribit in 2025 will help Coinbase consolidate its position in the US and global derivatives markets, respectively.
Take Jupiter’s acquisition of Drip Haus in early 2025 as an example. Jupiter is the leading decentralized trading aggregator on Solana, with the goal of expanding from the decentralized finance (DeFi) field to the non-fungible token (NFT) field. Drip Haus has built a highly active on-chain audience by providing free NFT collection distribution services to creators on Solana.
Because Jupiter is so tightly connected to Solana’s infrastructure and developer ecosystem, it has unique insights into which cultural products are gaining traction. It sees Drip Haus as a key center of attention, especially among the creator community.
With the acquisition of Drip Haus, Jupiter gains a foothold in the creator economy and community-driven NFT distribution space. This move enables it to expand NFT capabilities to a wider audience and offer NFTs as incentives to traders and liquidity providers. This is not just about collectibles, but about NFT channels that command attention natively on Solana. This ecosystem expansion marks Jupiters first foray into the cultural and content space, where it had no presence before. This is very similar to how Coinbase has systematically built out custody, prime brokerage, derivatives, and asset management capabilities through acquisitions.
Source: Bloomberg
Another example is FalconX’s acquisition of Arbelos Markets in April 2025. Arbelos is a professional trading firm known for its expertise in structured derivatives and risk warehousing. These capabilities are critical to serving institutional clients. FalconX, as a prime broker for institutional crypto funds, has knowledge of the derivatives volumes that flow through Arbelos. This may have convinced it that Arbelos is a high-value acquisition target.
By bringing Arbelos under its wing, FalconX strengthens its capabilities to price, hedge and risk manage complex crypto instruments. The acquisition will help them upgrade their core infrastructure to attract and retain sophisticated institutional capital flows.
3. Infrastructure distribution
In addition to talent, ecosystem, or users, some acquisitions are centered around infrastructure distribution. They embed a product into a broader stack to improve defensibility and market coverage. A clear example is ConsenSys acquisition of MyCrypto in 2021. While MetaMask was already the leading Ethereum wallet, MyCrypto brought user experience experiments, security tools, and a different user base focused on advanced users and long-tail assets.
The acquisition was not a full rebrand or merger, and both teams continued to develop in parallel. Eventually, they integrated MyCryptos feature set into MetaMasks codebase. This strengthened MetaMasks market position and fended off competition from more agile wallets by directly absorbing innovations.
These infrastructure-driven acquisitions are designed to lock in users at key levels by improving the tool stack and securing distribution channels.
4. User base acquisition
Finally, there is the most direct strategy: buying users. This is particularly evident in the competition in the NFT market, where the competition for collectors has become very fierce.
OpenSea acquired Gem in April 2022. At the time, Gem had about 15,000 active wallets per week. For OpenSea, the deal was a preemptive defensive move: locking in a high-value professional user base and accelerating the development of an advanced aggregator interface, later launched as OpenSea Pro. In a competitive market, acquisitions are more cost-effective when speed is critical. The lifetime value (LTV) of these users, especially professional users in the NFT space who often spend huge amounts of money, is likely to justify the acquisition cost.
An acquisition only makes sense when it makes economic sense. According to industry benchmarks, the average revenue per NFT user will be $162 in 2024. But Gems core user base - professional users - may contribute orders of magnitude more value. If the lifetime value of each user is conservatively estimated at $10,000, the value of these users means $150 million in value. If OpenSea acquired Gem for less than $150 million, the acquisition may have paid for itself from a user economic perspective alone, not to mention the saved development time.
While user-focused acquisitions don’t get as much attention as talent- or technology-driven deals, they’re still one of the quickest ways to solidify network effects.
What do these data show?
Here’s a macro view of the evolution of cryptocurrency acquisitions over the past decade — broken down by deal volume, acquirer, and target category.
As mentioned before, deal volume is not exactly in sync with price action in the public markets. In the 2017 cycle, Bitcoin peaked in December, but the MA wave continued in 2018. A similar lag is occurring this time around. Bitcoin peaked in November 2021, but crypto MA didn’t peak until 2022. Private markets react slower than liquid markets, often with a delay in digesting market trends.
MA activity increases significantly after 2020, peaking in both volume and cumulative value in 2022. But deal volume doesn’t tell the whole story. While MA activity cools in 2023, the size and nature of MA changes. The broad, defensive acquisition boom is over, replaced by more cautious category investments. Interestingly, despite the decline in MA volume after 2022, total deal value rebounds in 2025. This suggests that the market is not shrinking, but rather that mature acquirers are doing fewer, larger, and more targeted deals. The average deal size increases from $25 million in 2022 to $64 million in 2025.
Coinbase trading on Deribit is not included in this chart
In terms of target categories, early MA targets were more scattered. Market platforms acquired game assets, Rollup infrastructure, and a range of ecosystem investments covering early games, Layer 2 infrastructure, and wallet integrations. But over time, the target categories have become more concentrated. During the peak period of MA in 2022, transactions focused on acquiring trading infrastructure such as matching engines, custody systems, and front-end interfaces required to enhance trading platforms. Recently, MA has focused on the fields of derivatives and user-facing brokerage channels.
Coinbase trading on Deribit is not included in this chart
A deeper look at deals in 2024-2025 shows increasing concentration in MA. Derivatives venues, brokerage channels, and stablecoin issuers absorbed more than 75% of disclosed deal value. Clarity in the rules for crypto futures from the CFTC, a passport for stablecoins from MiCA, and Basel guidance on reserve assets have reduced risk in these areas. Giants like Coinbase have responded by buying regulatory outposts rather than building their own. NinjaTrader provided Kraken with the necessary licenses and 2 million customers in the U.S. Bitstamp provided MiCA-compliant trading coverage, while OpenNode connected the USD stablecoin channel directly to Stripe’s merchant network.
Coinbase trading on Deribit is not included in this chart
Acquirers are also evolving. In 2021-2022, exchanges led the MA trend by acquiring infrastructure, wallets, and liquidity layers to defend market share. By 2023-2024, the baton was passed to payment companies and financial instrument platforms, which targeted downstream products such as NFT channels, brokers, and structured product infrastructure. But with regulatory changes and underserved derivatives markets, exchanges like Coinbase and Robinhood have re-emerged as acquirers, acquiring derivatives and brokerage infrastructure.
A common feature of these acquirers is that they are well-funded. Coinbase has more than $9 billion in cash and cash equivalents by the end of 2024. Kraken achieved an operating profit of $454 million in 2024. Stripe has more than $2 billion in free cash flow in 2024. Most of the acquirers are profitable businesses by transaction value. Krakens acquisition of NinjaTrader to control the entire futures trading stack from user interface to settlement is an example of a vertical acquisition, which aims to control more of the value chain. In contrast, horizontal acquisitions aim to expand market coverage at the same level, and Robinhoods acquisition of Bitstamp to expand geographic coverage is an example. Stripes acquisition of OpenNode combines vertical integration and horizontal expansion.
Coinbase trading on Deribit is not included in this chart
Remember the story of Googles acquisition of Android? Instead of focusing on short-term revenue, Google prioritized two things that simplified the entire mobile experience for hardware manufacturers and software creators. First, provide a unified system for hardware manufacturers to adopt. This will eliminate the fragmentation that plagues the mobile ecosystem. Second, provide a consistent software programming model so that developers can create applications that run on all Android devices.
You can see similar patterns in the cryptocurrency space. Well-funded incumbents are not just filling gaps in their businesses, but aiming to strengthen their market positions. When you dig into the latest acquisitions, you see a gradual strategic shift in what is being acquired and by whom. The point is, we are seeing signs of maturation across the industry. Exchanges are strengthening their moats, payment companies are racing to dominate channels, miners are building up their power ahead of the halving event, and hype-driven verticals like gaming have quietly disappeared from the MA records. The industry is starting to understand which consolidations actually have a compounding effect and which just consume capital.
The gaming space is a great example. In 2021-2022, investors collectively invested billions of dollars to support gaming-related startups. But since then, the pace of investment has slowed down significantly. As Arthur mentioned in our podcast, investors have lost interest in the gaming space unless there is a clear product-market fit.
Source: funding.decentralised.co
This context makes it easier to understand why so many MA deals, despite strategic intent, fail to live up to expectations. It’s not just about what is acquired, but how well it is integrated. While cryptocurrencies are unique in many ways, they are not immune to these issues.
Why MA often fail
In their book, The MA Failure Trap, Baruch Lev and Feng Gu studied 40,000 MA cases worldwide and concluded that 70%-75% of MA fail. They attributed the failure to factors such as target companies being too large, target valuations being too high, acquisitions that are unrelated to core businesses, weak target operations, and misaligned incentives for executives.
There have also been some failed MA cases in the cryptocurrency space, and the above factors apply here as well. Take FTXs acquisition of portfolio tracking app Blockfolio for $150 million in 2020. At the time, the deal was promoted as a strategic move to convert Blockfolios 6 million retail traders into FTXs trading users. Although the app was renamed FTX App and briefly gained some attention, it failed to significantly increase retail trading volume.
Worse still, when FTX collapsed in late 2022, the partnership with Blockfolio almost completely disappeared. Years of accumulated brand equity were wiped out. It’s a reminder that even acquisitions with a strong user base can be undone by the overall failure of the platform.
Many companies make mistakes by moving too quickly when acquiring. The picture below shows how fast FTX was when acquiring, and perhaps this speed was unnecessary. It acquired the license through acquisition, and the picture below shows its company structure after the acquisition.
Source: Financial Times
Polygon is a notable example of the risks of an aggressive acquisition strategy. Between 2021 and 2022, it spent nearly $1 billion acquiring zero-knowledge proof-related projects such as Hermez and Mir Protocol. At the time, these moves were praised as visionary. But two years later, these investments have yet to translate into meaningful user adoption or market dominance. One of its key zero-knowledge proof projects, Miden, was ultimately spun out into an independent company in 2024. Polygon, once at the center of the cryptocurrency conversation, has fallen significantly in strategic relevance. Of course, these things often take time, but as of now, there is no substantive evidence of a return on investment from these acquisitions. Polygons acquisition spree is a reminder that even if well-funded, talent-driven acquisitions can fail without the right timing, integration, and clear downstream use.
There have also been failed acquisitions in the on-chain native DeFi space. In 2021, Fei Protocol and Rari Capital merged and swapped tokens with joint governance under the newly formed Tribe DAO. In theory, the merger promised deeper liquidity, lending integration, and collaboration between DAOs. But the merged entity soon became embroiled in governance disputes and suffered a costly Fuse market exploit, and ultimately the DAO voted to return funds to token holders.
Nonetheless, the cryptocurrency space has an advantage over traditional industries in terms of successful MA for three reasons:
An open source foundation means that technology integration is often easier. Due diligence becomes more straightforward when much of your code is already public, and there are fewer issues with merging code bases than with merging proprietary systems.
Token economics can create incentive alignment that traditional equity can’t match, but only if the token has real utility and value capture. When teams on both sides of the acquisition hold tokens of the combined entity, their incentives remain aligned long after the deal is complete.
Community governance introduces accountability mechanisms rarely seen in traditional MA. When major changes must be approved by token holders, it becomes much more difficult to push a deal based solely on the arrogance of an executive.
So, where do we go from here?
Built to be acquired
Today’s fundraising environment requires a pragmatic attitude. If you are a founder, your pitch should not only be “why we should raise money” but also “why someone might acquire us.” Here are the top three drivers of the current cryptocurrency MA landscape.
First, venture capital will be more precise
The funding environment has changed. Venture capital has plummeted more than 70% since its 2021 peak. Monad’s $225 million Series A and Babylon’s $70 million Seed round are outliers, not evidence of a market rebound. Most VCs focus on companies with momentum and a clear business model. With interest rates raising the cost of capital and most tokens failing to demonstrate a sustainable value accumulation mechanism, investors have become extremely selective. For founders, this means having to consider acquisition offers while considering an increasingly difficult funding path.
Second, strategic leverage
Well-funded incumbents are buying time, distribution channels, and defensibility. As regulatory clarity improves, licensed entities become obvious acquisition targets. But the appetite for acquisitions doesn’t stop there. Companies like Coinbase, Robinhood, Kraken, and Stripe are acquiring to get to market faster in new regions, gain a stable user base, or compress years of infrastructure buildout into a single deal. If you’ve built something that reduces legal risk, speeds up the compliance process, or provides an acquirer with a clearer path to profitability or reputational enhancement, you’re already on the acquirer’s radar.
Third, distribution and interface
The missing link in infrastructure is getting products into users’ hands quickly and reliably. The key is to acquire the pieces that unlock distribution channels, simplify complexity, and reduce time to product-market fit. Stripe acquired OpenNode to simplify cryptocurrency payments. Jupiter acquired DRiP Haus to add NFT distribution capabilities to its liquidity stack. FalconX acquired Arbelos to add institutional-grade structured products, which may make it easier to serve different customer segments. These are all infrastructure strategies designed to expand coverage and reduce operational friction. If you build something that enables other companies to grow faster, reach wider, or serve better, you are on the acquirers short list.
This is an era of strategic exits. Build your company with the understanding that your future depends on others wanting to own what you create.
