Most Active Investors

2023-03-02 02:47:16 UTC

The digital asset industry has seen significant funding activity in the last two years, as 2021 and 2022 correspond to 60 percent of the total deals since 2017. Coinbase Ventures tops the list with 355 investments in the space, followed by Animoca Brands and Alameda Research.

It is interesting to note that almost all the investments of Animoca Brands, Shima Capital, Polygon Studios, etc correspond to the last two years. However, HashKey Capital, Pantera Capital, Digital Currency Group, etc., have been active in the industry in the preceding years as well.

Animoca Brands has a clear focus in NFT/Gaming category, as 79% of their investments are in that category. Coinbase's number of investments in CFS is head and shoulders above others, as it has been a part of 58 CFS-based funding rounds. Coinbase also leads in the number of Infrastructure, DAI, Trading/Brokerage, and DeFi category investments when compared with its competitors.

Blockchain investments mentioned above only consider on-chain investments, which do not include investments made into agnostic or unverifiable protocols.The multi-chain protocols seem to be a primary focus of investors.

Based on the fund formations by venture capitals over the years, a16z has dedicated the highest amount of capital to the digital asset sector. Paradigm and FTX Ventures are the only two crypto-native firms that had raised over $2 billion.

HashKey Capital

HashKey Capital has 321 investments in the digital asset sector. 23% were Infrastructure, 21% DeFi and NFTs/Gaming represented 19% of the portfolio. HashKey Capital has participated in a total of 109 Seed or Pre-Seed investments for infancy stage projects. Scaling solutions and layer-2 projects have been one of the focus of HashKey Capital, investing in 9 different projects. HashKey has made 16 DAI investments specifically into Data Storage and Social Networks sub-categories.

Mergers and Acquisitions


M&A sector has witnessed significant growth since 2018. 88% of the deals recorded since 2013 have occurred in the last five years. 2021 saw the maximum consolidation across categories in the digital asset sector, showcasing a record 233 transactions.

Relatively more mature categories like CFS, Infrastructure, and Trading/Brokerage observed higher consolidation compared to the rest of the categories. The Fundamental Categories contributed to 61% of the total M&A deals. The majority of them were recorded occurred in 2021. In 2021, 95% of the documented amount transacted was attributed to Fundamental Categories.

The recorded transaction amount for 2021 is a whopping $5.9 billion, where most purchasing parties have been pre-existing crypto native players. This suggests changing operational dynamics for category-leading players as they changed strategies. More prominent organizations acquired the smaller players in the market to weed out the competition and diversify into an entity providing a full range of product/ service suites. As markets cool off after bull runs, the correction tends to offer lucrative deals for acquirers.

A YOY increase of more than 100 percent has been witnessed only twice in the last 10 years, and both incidences occurred after bull runs in the sector.

Trading/Brokerage has seen 139 M&A transactions totaling $4.94 billion. The DeFi category has seen only 29 deals totaling $167 million.This depicts that DeFi still exhibits nascency.

71% of the total M&A deals recorded in the digital asset sector without transaction details. The available information for these transactions either did not contain explicit information about the terms of the deal or had convoluted terms which do not directly point to the amount for which the acquirer purchased the firm. We categorize such deals under 'N/A' for clarity of assessment.

M&A Category Wise Analysis

This section contains Category wise macro-level analysis, which depicts deal count and the average amount of a deal specific to subcategories. The deal amount for most of the M&A transactions is unavailable; hence inspecting of 'Sum of all deals under the subcategory' will prove futile to gauge the size of individual subcategory consolidations. An average of available data points leaves less room for speculation in this case.

Crypto Financial Services


The CFS category observed 159 M&A transactions, 39 of which had precise transaction details. The Payments/Payments Services subcategory saw a higher consolidation than others. Renowned companies like Republic, Gemini, Robinhood, Coinbase, Kraken, and Celsius Network are some notable purchasing stakeholders active in the CFS category. Republic, a private investing platform and technology services provider that enables users to invest in early-stage companies has been the most active purchaser of companies classified under CFS. Seven of the companies Republic acquired were under the Fundraising/ Incubator subcategory.

Simplex, a fiat gateway for crypto providers, was acquired by a payment technology company named Nuvei for $250 million, making it the largest M&A transaction for the CFS category.


$3.5 billion of consolidation is attributed to projects under Infrastructure. R&D and Mining/Node Infra are two dominating categories that contribute to 70% of the total deals under Infrastructure. It also makes up 93% of the total transaction amount recorded under Infrastructure deals. The disparity between the interested purchasing giants like Northern Data, Polygon, Coinbase, etc., and smaller firms in R&D, Mining/Node Infra subcategories is vast. More prominent companies capitalize on this disparity and acquire smaller firms to expand in new geographies and/or improve their product/service offerings. They also tend to acqui-hire most of the firms and acquire their talent to scale and diversify faster than the competitors. Coinbase has been the most active investor with 12 Infrastructure-related acquisitions.

Northern Data, a company that develops high-performance infrastructure solutions, acquired a bitcoin mining hardware company, Bitfield, for $575 million, making it the largest acquisition in Infrastructure.



DeFi corresponds to the lowest M&A deals among all the categories. None of the Top 100 TVL DeFi protocols have made an acquisition or have been acquired by any company. The Asset Management subcategory attracted the most attention as it accounts for $211 million out of the $222 million transacted in DeFi M&A.

Acquisition of iBG Finance by ICOA, a national provider of wireless and wired broadband Internet networks in high-traffic public locations, for $185 million in the biggest M&A deal in the DeFi category. Coinbase and Headline Crypto are the only two companies to have acquired more than one firm in DeFi.

13 deals were classified under the DEX/Liquidity category, but none of the deals disclosed the acquisition amount.


This category corresponds to 75 M&A deals. The deals are spread over various subcategories like Game Studio, Gaming, Infrastructure, Marketplace Platform, etc. The acquisition of GemNFT by Opensea in Q2 2022 for $238 million is the largest M&A transaction in NFTs/Gaming category history. Although acquired, the NFT marketplace aggregator, Gem, still operates as a standalone entity.

Increased occurrence of Mid-Stage funding deals for NFTs/Gaming suggests maturation for the category. So naturally, as this sub-sector matures, the competition in the landscape will increase as more participants compete for the same piece of the pie, leading to consolidation.

Animoca Brands is the undisputed leader in the NFT domain in M&A. It has acquired 18 companies, predominantly Gaming Studios like Notre Games, Eden Games, etc.

Although the terms of the deals were not disclosed, one Q1 2022 M&A deal is worth mentioning. Yuga Labs, the spearhead studio of NFT PFPs and creators of the BAYC, acquired Larva Labs' IP rights of Cryptopunks and Meebits. After this acquisition, Yuga Labs introduced Otherside. Conceptualized as a metaverse that intertwines NFT-powered virtual worlds with elements of massively multiplayer online role-playing games (MMORPGs), Otherside is geared towards an interoperable virtual experience. Otherside is easily the most flamboyant attempt of a bootstrapped metaverse by a gaming studio whose promising value proposition attracted an investment of $450 million from ace investors like a16z, Animoca brands, etc. 



This category attracted the maximum recorded deal amount compared to other categories. Trading/Brokerage corresponds to $4.9 billion of deal transactions since 2013. Brokerage companies have the highest average deal amount compared to all the subcategories. Pure Exchange and Brokerage subcategories contribute almost 95% of the total amount transacted in Trading/Brokerage M&A.

FTX's acquisition of the bankrupt lender Voyager's assets for $1.4 billion at a bid auction in September 2022 is the largest M&A transaction ever recorded. The deal breakdown resulted in FTX paying at least $111 million for Voyager's non-crypto assets, including its users and intellectual property.

Kraken, Coinbase, and FTX/Alameda Research have been the leading acquirers in this category with 7,6,6 acquisitions, respectively. The Boston-based cryptocurrency firm, Circle, sold its once-flourishing over-the-counter (OTC) trading operation to Kraken for an undisclosed amount. DCG acquired Luno, the cheapest spot trading exchange, providing them with investment capital, partnerships, etc., by keeping the exchange's individuality intact. Since the acquisition, Luno has adopted a zero-maker fees exchange model, making it one of the cheapest for spot trading.


Web3 observed $167 million of M&A transactions, and 87% of the recorded amount attributes to Data/Storage subcategory. Justin Sun's Tron Foundation acquired BitTorrent for $140 million to absorb its already established decentralized network architecture into Tron Foundation, making it the largest M&A deal in the Web3 category. Web3 development is in its initial phase. With only 32 deals in the last ten years,Web3 projects are set to evolve as we believe the necessary infrastructure for these projects is in better shape than before.

Binance, Tron Foundation, and Dapper Labs have acquired two firms each in the Web3 space.


DLT subcategory has witnessed maximum consolidation in this category, totaling 29. Digital Asset Holdings, a company that offers developer tooling and infrastructure solutions to businesses, acquired three companies in 2015-2016. However, Huobi's acquisition of controlling interest in Patronics Holdings, a Hong Kong-based investment holding company, for $77 million for 71.67% of the total shares is the most significant transaction to have occurred in the Enterprise M&A space.



67 M&A transactions are attributed to the Data/Analytics/Information category. Investoo Group and Coinbase led the acquisitions for this category as they fully acquired 10 and 5 firms, respectively.

In April 2020, Binance acquired CoinMarketCap for $400 million. Since then, CoinMarketCap has added various education and trading-related services to its service suite. Following up on this development from its competitor, in August 2020, FTX acquired Blockfolio, a live price tracking application, to expand its footprint in the retail market.

Binance is the leading multinational crypto exchange growing its geographical operations and product offerings at a breakneck pace. FTX, too, projected a similar trajectory only to falter miserably in November 2022, but Binance's acquisitions are more distributed across various categories as compared to FTX.

FTX's six out of eight acquisitions are within Trading Brokerage, whereas Binance has bought firms from every category except DeFi and NFTs/Gaming.

Most Active Firms in M&A


Coinbase and Animoca Brands lead the race with 30 and 22 acquisitions, respectively. Coinbase acquisitions are more diversified, with a soft focus on Infrastructure and Trading/Brokerage. On the contrary, Hong Kong-based blockchain gaming conglomerate Animoca Brands' acquisitions are highly concentrated in the NFTs/Gaming category. Notably, 18 out of 22 acquisitions for Animoca are from NFTs/Gaming. Animoca has raised at least $600 million year-to-date among its subsidiaries to fund strategic acquisitions, investments, and product development.

FTX, led by Sam Bankman-Fried, primarily played 'clean up' for the crypto sector after the recent collapse of Terra and crypto lending providers. Although the firm itself had no money to help itself, it extended lenders' support and concentrated on purchasing distressed assets. Such  activities include its extended credit lines to BlockFi and Voyager Digital, the option to acquire BlockFi, and the purchase of Voyager's assets and intellectual property. Based on recent revelations, FTX was utilizing user funds for their own and Alameda Research's transactions, which has created a massive hole of over $10 billion in the digital asset industry.

10 of the 15 most active firms in blockchain-specific M&A provide digital asset trading services. These conglomerates have taken over companies of various categories and are not restricted to Trading/Brokerage. As user adoption increases in various stages of a market cycle, trading exchanges benefit immediately as the users access various services offered by exchanges like spot trading, margin trading, token listing, Initial Exchange Offering, OTC deals, etc. When user  engagement is high, the exchanges experience a windfall, creating a sudden capital for investments and acquisitions. To stay relevant and stay ahead of the competition, these firms  influx this capital into acquiring companies with strong potential or companies that may fulfill voids that the current product/service suite may have.

However, cryptocurrency exchanges further up on the list, including Coinbase, Binance, and Kraken, have been noticeably inactive with their M&A pursuits. Of these three exchanges, Coinbase is the only one to have made an acquisition this past year, purchasing the U.S.-based derivatives platform FairX in January.  

On the contrary, an intriguing observation among these companies is that the firms later down the list, including Gemini, WonderFi, Graph Blockchain, and Robinhood, have a much larger concentration of their acquisitions occurring in 2021 and 2022.Twenty of the twenty-two acquisitions by these four companies were over the past two years.