The Evolving Landscape of Fintech: Cryptocurrency, Mergers & The Quest for Verification

A New Age of Mergers and Acquisitions

As companies shake off the cobwebs left by the pandemic, a wave of M&A activity is surging forth. FTI Consulting’s survey indicates that over 60% of decision-makers believe they’ve been targeted in aggressive M&A efforts, with 39% seeking acquisitions as a strategic response to the Covid-19 fallout. Welcome to the world where finance meets fancy!

Cryptocurrency: The New Frontier

With cryptocurrency making its march towards mainstream acceptance, there’s an expected spike in M&A deals focused on crypto assets. In fact, while the pandemic kept many of us in our homes, it failed to dim the sparkle of crypto-related M&A, which hit a meteoric $600 million in the early days of 2020. Buckle up — 2021 is set to be even more exciting!

Digitization: From Cash to Crypto

COVID-19 accelerated our relationship with digital services. According to S&P Global, by 2023, the shift to digital payments is expected to involve around 420 billion transactions totaling $7 trillion. This leap is paving the way for cryptocurrencies to join forces with giants like PayPal and Visa.

• PayPal embraced Bitcoin in November 2020 and was quick to snatch up the Israeli startup Curv to amplify their crypto capabilities.
• Visa didn’t get left behind, splurging $5.3 billion on Plaid — and you can bet they’ve got their eyes on crypto!

Due Diligence: More Than Just a Check-Up

As any good doctor will tell you, the key to successful M&A is thorough due diligence. And when deals involve cryptocurrencies? Let’s just say things get a bit, shall we say, complex. Buyers need to ensure they can verify the digital assets involved, which is a bit like trying to find Waldo in a sea of striped shirts.

In-depth assessments for crypto-focused firms become essential, ensuring everything’s above board before any significant cash changes hands. For potential acquirers, non-negotiable checks should include:

• A comprehensive inventory of digital assets held in various wallets
• Scrutiny of potential risks in crypto contracts and policies
• Technical audits of platforms, wallets, and interfaces

Calling All Crypto Experts

To navigate the murky waters of crypto assessments, enlisting a domain expert isn’t just helpful — it’s a survival tactic. These experts can shed light on risks that lurk around every digital corner, and their insights can be the difference between making a mint or a massive mistake!

Understanding the intricate details of a target company’s cryptocurrency framework means diving deep into not just the assets, but also the governance, security policies, and partnerships that could make or break a deal.

Final Thoughts: The Future is Bright (and Digital)

Looking ahead, as the lines blur between traditional financial services and tech-savvy cryptocurrency models, both sides of the equation are set to redefine merger landscapes. A tech-driven, expert-led approach to assessing crypto assets is no longer optional; it’s a necessity for those looking to thrive in this brave new world of fintech.