The consolidation of the Market as a Result to Low Prices
There has been an industry-wide increase in mergers and acquisitions in the cryptocurrency market. This increase came as a result of a bearish sentiment in the market. Deals are nailing by more than 200 percent year on year in 2018. JMP Securities for Pitchbook compiled figures that portray 115 deals already announced all over the world this year. About 30 more deals are being expected by the end of December, compared with just 47 mergers and acquisitions that were completed throughout 2017.
“You’re seeing a mispricing of assets,” Satya Bajpai, head of digital assets investment banking at JMP Securities, told CNBC. “Even for great businesses, the value of the token remains correlated to bitcoin, which can create an ideal opportunity for strategic acquirers.”
Many already-established companies are using this opportunity to buy startups. Their aim with such deals is to gain access to human resources, not just to secure new products and technologies.
“As soon as a company becomes interesting, they get bought,” said Bajpai. “The deal size may still remain small, but the number of deals will increase because that’s the most viable and fastest way to grow in this environment.”
Strict Rules on Virtual Assets
A clarification was issued last week by a Paris-based intergovernmental organization, on recent recommendations made by the said-organization on the regulation of virtual assets. According to them, all countries of the world need to take coordinated actions to prevent the use of such assets to fund terrorism and criminal activities. Dubbed the Financial Action Task Force, the aim of the organization is to stamp out money laundering and terrorism financing.
“All jurisdictions should urgently take legal and practical steps to prevent the misuse of virtual assets,” said the organization, which is known as Groupe d’action financière in France.
“This includes assessing and understanding the risks associated with virtual assets in their jurisdictions, applying risk-based [anti-money laundering and counter-terrorism financing] regulations to virtual asset service providers and identifying effective systems to conduct risk-based monitoring or supervision of virtual asset service providers.”
June is the dateline for the organization to set its own rules on the mandatory oversight of cryptocurrency businesses. It may be added to a blacklist that all countries will not comply. It is also the wish of the organization that national governments all over the world start imposing more rules and regulations on ICOs and encrypted wallet providers.