The landscape of corporate mergers and acquisitions (M&A) is poised for significant change as the potential return of the Trump administration may ignite a flurry of activity, with implications that could extend to the adoption of cryptocurrency. Hunter Horsley, the CEO of Bitwise Asset Management, suggests that an upsurge in M&A deals is likely to drive individuals towards digital assets as they may increasingly perceive decentralised systems as more advantageous over centralised institutions that might not act in their best interests.
According to Horsley, speaking to Crypto Briefing, "The conceptual premise of crypto is not trusting large institutions to do what’s in your best interest. The big getting bigger accentuates this." This statement highlights the growing concern over the concentration of corporate power, which he believes may push consumers and investors alike towards cryptocurrencies. As corporations consolidate their market power, this could further foster the belief in the need for decentralisation.
Data from Dealogic indicates that M&A activity had been stagnating prior to this anticipated resurgence, with only a modest increase in total deals announced in 2024, reaching $1.4 trillion, a figure still below pre-pandemic levels. The year ahead is expected to set the stage for a substantial revival in M&A, driven in part by a more favourable economic environment, lower interest rates, and shifts in regulatory landscapes that may be instituted under a Trump presidency.
Horsley speculates that 2025 could witness a pivotal moment in this regard, with industry giants potentially using their substantial market capitalisation to pursue significant acquisitions. "Large corporates — mag 7, etc — may finally be able to wield their market cap. Amazon could buy Instacart. Google could buy Uber," Horsley remarked, pointing to the capacity of large companies to dominate their respective sectors.
As consolidation appears to be on the horizon, which could marginalise mid-sized firms unable to compete against such formidable entities, the reliance on traditional institutions may diminish. This change could further bolster the appeal and adoption of cryptocurrencies, which are rooted in the principle of minimising trust in large organisations. The trajectory towards a more decentralised financial landscape thus seems likely to gain momentum alongside an upswing in corporate mergers and acquisitions.
Source: Noah Wire Services