Just two weeks ago, we witnessed the crypto industry's largest acquisition to date: U.S. payments giant Stripe, valued around $70 billion, acquired Bridge, a stablecoin-focused payments platform, for an impressive $1.1 billion. Building on this momentum, Bridge itself acquired Triangle earlier this week — a web3 wallet-as-a-service platform that enables applications to onboard users seamlessly to the blockchain.

In recent weeks and months, the list of notable crypto M&A deals has continued to grow. Robinhood purchased Bitstamp for $200 million, Crypto.com acquired Watchdog Capital to expand into equities, Nomura-backed Komainu acquired Singapore-based crypto custodian Propine Holdings, Matrixport took over Crypto Finance AG and Bitwise acquired ETC Group while also entering an agreement with Osprey Funds to merge their bitcoin funds.

But what's sparking this M&A frenzy? A mix of strategic and market-driven factors, industry insiders told me.

Yat Siu, co-founder and executive chairman of Animoca Brands, sees consolidation as a sign of market maturity. "There have been a series of M&As already that are not yet made public that we know in our portfolio both on the buyer and seller sides," Siu said.

Lauren Stephanian, general partner at Pantera Capital, attributes the increase to the rise in stablecoin usage, which is capturing fintechs' attention as an alternative payment method. "Some strategics have been building up war chests and are looking to knock out competition before it grows too large," she said. "All it takes is one big deal to kick off an M&A frenzy." Stephanian sees the Stripe-Bridge deal as a signal of fintech's renewed interest in crypto.

Jack Platts, founder of Hypersphere Ventures, however, questions the deal's valuation. Based on Bridge's $10 million annual revenue, "the math doesn't work out to a billion [dollar valuation]," he said, adding that the acquisition could be partially an "acqui-hire" to secure talent or a defensive move to keep other players out of the cross-border and cross-currency payments space. Bridge's impressive client list, which includes names like SpaceX, may have added to its appeal, Platts said.

According to Jed Breed, founder and general partner of Breed VC and former head of digital assets at Circle, the stablecoin business model is highly profitable, attracting fintech interest in the sector. He noted that Tether reported $7.7 billion in profit year to date alone. Breed said that established players are eager to capitalize on the substantial returns generated by holding U.S. treasuries via stablecoins.

Bill Qian, chairman of Cypher Capital and former global head of fundraising at Binance Labs and M&A for Binance, credits the rising M&A trend to growing crypto adoption and regulatory clarity, which he believes has made traditional players more comfortable acquiring innovative startups.

Alvin Leong, investment manager at NGC Ventures, points to strategic motives. He highlights acquisitions like Stripe's purchase of Bridge and Robinhood's acquisition of Bitstamp as examples of how more web2 companies are venturing into crypto.

Breed predicts further consolidation among on-chain protocols, especially as decentralized exchanges (DEXs) look to solidify their niches in a maturing market. He believes the Stripe-Bridge deal could pave the way for more equity-based mergers. However, since most venture investments in the space still involve some token component, straightforward equity deals remain limited, he said. When tokens are part of the mix, merging decentralized, permissionless protocols becomes far more complex due to securities laws and other regulatory hurdles, Breed said.

Siu expects M&A activity to extend beyond financial services, with sectors like gaming and even memecoins potentially seeing consolidation. He anticipates that mergers will become common across various niches as the market evolves.

Looking forward, Qian also envisions a major wave of crypto M&A, driven by industry maturation. He sees payment tech and licensing as essential targets, allowing acquirers to leverage regulatory-ready solutions and accelerate market entry.

Stephanian of Pantera expects consolidation in payments, analytics and developer tools. "I've also been seeing more interest from companies in figuring out how acquisition of protocols can work, so I think we'll start to see more creative deals occur over the next couple of years," she said.

Siu foresees an uptick in acquisitions as major gaming companies pursue web3 game developers for their innovation "and we expect that to reach in the many billions of dollars." He believes this trend will extend to traditional financial players acquiring web3 companies, with gaming and finance intersecting as drivers of M&A across the industry.

Qian predicts stock trading platforms like Robinhood, Webull and eToro will continue acquiring crypto licenses across jurisdictions. He also expects global payments giants such as Visa, Mastercard, PayPal, Square and Europe's Adyen to focus acquisitions on stablecoin payment licenses and related technologies, signaling a deeper integration of crypto into their offerings.

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Why Crypto M&A Deals Are on the Rise