Recently, interest in cryptocurrency as a replacement for traditional finance has grown significantly, and this is the obvious reason for the growth in the value of Bitcoin and all major cryptocurrencies. Increased demand is manifested by institutional investors. Such a rapid development of the crypto industry in America may soon lead to the fact that entrepreneurs will have the opportunity to start M&A transactions in the US cryptocurrency sector.
However, there are differing expert opinions on the conduct of mergers and acquisitions in the cryptocurrency industry in the United States, which will be discussed in this article.
Company acquisition for provision of crypto services in the USA: the skeptics’ opinion
There are those who believe that there are still not many buyers in this area in America. Large digital exchanges, such as Coinbase, which are large enough to carry out M&A deals in the US cryptocurrency industry, can be counted on one hand.
Smaller players cannot afford such deals. This is the basis of the opinion of skeptics who predict a very modest number of transactions in this direction compared to the prospects for other technological areas. At least for the next few years. However, the market is changing so quickly that no one undertakes to make long-term forecasts.
M&A deals in the US cryptocurrency sector: the optimists’ opinion
Those planning to register a company for crypto activity in the United States of America will be interested to know that there is an opposite point of view, and it is filled with optimism. Some visionaries foresee that crypto organizations will soon dominate the technology and financial services industry.
After solving the issues with state regulation of the crypto-firms in the U.S., such experts see three possible options for growth through mergers and acquisitions:
- Mechanisms will be developed through which Wall Street businesses can conduct acquisitions of U.S. crypto-firms.
- Large tech enterprises will be able to initiate M&A transactions through the acquisition of crypto companies in the United States.
- Large cryptocurrency firms will become new technology structures and Wall Street firms that will interest investors.
A group of experts believe that the third possibility is the most likely.
Registration of a crypto business in the USA: accompanying changes
No one can deny the fact that institutional demand for Bitcoins is skyrocketing during the coronavirus pandemic. For example, some well-known bitcoin trusts received quarterly inflows of almost 1 billion USD, the largest in their entire existence.
Those planning to obtain a license for crypto activities in the United States may also be interested in the situation with the Integrated Ventures holding. This firm operates in the cryptocurrency sector and in the current situation with COVID-19 sees great opportunities for further development.
In this regard, Integrated Ventures announced that it has entered into a contract with Eagle Equities (a company in the Philippines) in the amount of USD 1,000,000. The deal is valued at USD 1.08 million. These investments will be used to expand cryptoasset operations and support future transactions.
U.S. banks to store cryptocurrency
Recently, the Currency Control Board said U.S. banks and federal savings associations can store cryptocurrencies. If you are interested in obtaining a banking license in the United States, it is worth considering that the provision of cryptoasset storage services, including the storage of unique crypto keys, has already become the new norm and has even moved into the category of traditional banking. Previously, the regulation of cryptocurrency activities in the United States was not subject to specific legislation. After amending the legal framework, national banks can provide banking services to any legitimate business of their choice, including the cryptocurrency sector. At the same time, nevertheless, a number of mandatory conditions are put forward - effective risk management and strict observance of the law.
The requirement to obtain a license to operate cryptocurrency in America applies to cryptoassets held in trust, for example, from an investment advisor.
The ongoing legitimization of cryptocurrency in the financial space may mean that the demand for M&A deals for US crypto companies will soon increase.
As financial markets become more digitized, the need for innovative technologies will also increase.
To keep abreast of the latest information on changes in the crypto industry, you can order a consultation on the regulation of crypto companies in the USA from IQ Decision UK specialists.