With a cautious but hopeful outlook, the mergers and acquisitions (M&A) environment in the cryptocurrency business is changing. During a recent discussion, Tony Scuderi, CEO of Imperii Partners, offered insights to Coinage host Zack Guzman on the ins and outs of deal-making, the importance of infrastructure firms, and future predictions.
Guzman began the conversation by pointing out the developments in the field outside of venture capital (VC) deal-making. Reacting, Scuderi stated, “Deal making is off to a bit of a slow start relative to the bullishness we’ve seen.” He clarified that although interest rates are still high, the current situation of the financial system and regulatory concerns have restrained activity. Several businesses that have made it through the past few years are in a stronger position and are not under as much pressure to sell.
Speaking about the cryptocurrency industry’s life cycle, Guzman pointed out that developing infrastructure is a must for closing significant deals. Infrastructure companies are currently the most valued in the cryptocurrency space, according to Scuderi. In the industry today, those are often our buyers, he said. In the coming years, he anticipates a large amount of M&A activity in which non-crypto companies acquire crypto businesses.
Scuderi stressed the significance of infrastructure when questioned about the most interesting market niche. He observed that there is fierce competition in the bitcoin layer-one (L1) and layer-two (L2) areas. “We’re seeing all kinds of new projects, especially in layer-two, to optimize and create utility,” he explained. Imperii Partners, on the other hand, is more interested in businesses that facilitate blockchain protocols, go through venture capital rounds, and get ready for M&A possibilities.
Guzman then compared traditional banking with cryptocurrency, focusing on the distinctions between VC and M&A. “We’ve taken a VC approach to investment banking,” Tony clarified. He explained how Imperii Partners works closely to maximize exits that benefit investors, matching its success with that of its clients.
Next, the topic of discussion was the current deal flow, which Scuderi acknowledged is not as strong as anticipated. He brought out recent big acquisitions that boded well for future expansion, such as Forecaster’s $150 million round. Scuderi went into more detail on the regulatory and practical issues that traditional businesses thinking about acquiring cryptocurrency must deal with.
Scuderi confirmed that “we’re early” in the cryptocurrency space in response to a question. “It is indeed real. In order to drive utility, we must concentrate on the application layer, even though we’ve constructed incredible frameworks,” he stated. The intention is broad adoption of crypto-based technologies, to the point where users may not even be aware of their use.
Guzman called for audacious predictions for the remaining months of the year. Scuderi said that this year would witness a crossover deal worth billions of dollars from outside the cryptocurrency sphere, and he also predicted that non-crypto companies would undertake strategic acquisitions to gain traction in the market.
According to Scuderi, big agreements are approaching as the infrastructure of the sector matures. The crypto M&A environment is set to see fresh changes as regulatory clarity improves and mainstream acceptance increases.
