Author: Paul Veradittakit, Managing Partner of Pantera Capital; Translated by Shaw Jinse Finance
Summary
Cryptocurrency companies have raised over $16 billion in over 100 mergers and acquisitions so far this year, putting the industry on track to set a new record and exceed total deal value in 2024.
This cycle is fundamentally stronger, driven by greater regulatory clarity in the United States and growing momentum globally.
The wave of strategic mergers and acquisitions and initial public offerings (IPOs) will continue into the next cycle.
In 2025, record-breaking M&A and initial public offering (IPO) activity is reshaping and elevating the cryptocurrency sector. This is driving a massive influx of new capital, institutional investors, builders, and users, fueling blockchain innovation and adoption. This is a common pattern seen in other major technological shifts: decades of construction followed by explosive growth. While the rise of artificial intelligence benefited from decades of infrastructure investment, cryptocurrency is maturing at a much faster pace. It benefits from a more advanced technical architecture, enabling it to leverage better tools to accelerate development, which is why the underlying dynamics of the current market are fundamentally different from previous cycles, driven more by strategic consolidation than by speculative speculation. Momentum is Accelerating: Why This Cycle Is Different The cryptocurrency market has exhibited a sine wave-like pattern, with ups and downs. Despite a slowdown in venture capital, the market remains optimistic due to favorable regulations, crypto-friendly governments, strong deal flow, companies like Robinhood doubling down on crypto, and the deep integration of crypto with adjacent verticals. Since peaking in 2022, capital investment has declined sharply in 2023, before recovering in 2024 and accelerating significantly in 2025. In the second quarter of 2025 alone, 31 deals exceeding $50 million were completed, with late-stage financings such as IPOs, mergers and acquisitions, and debt financing driving growth. So far this year, the cryptocurrency market has attracted $16.1 billion in funding. However, like traditional VC, crypto venture capital (VC) remains concentrated in a small number of funds. Concentrated funding typically results in larger individual investments but fewer deals overall. This reflects the fact that many cryptocurrency companies are evolving into growth-stage companies and indicates that the fundraising environment is more competitive than ever for both founders and investors. A confluence of forces has made this cycle unique. Token prices are rebounding, new products are being launched, founders are gaining confidence in the industry, and favorable regulations are providing clarity for stablecoins and digital assets, all of which are injecting capital into the sector. For years, regulatory uncertainty, fears of potential penalties, have created friction between innovators and the Web3 community. With the Trump administration's crypto-friendly stance, we've witnessed the emergence of building blocks for on-chain adoption, namely the Genius Act and the Clarity Act. While we can't say with certainty how these bills will impact the distant future, it's certain that these discussions and actions will reduce intellectual and financial hesitation to invest in the space. Furthermore, the expected November rate cut by the Federal Reserve will drive more capital into risky assets, with digital asset treasury reserves (DATs) locking up funds in long-term assets. Investor risk aversion is gradually waning, leading to more positive capital flows. Investment allocations have shifted, with one-third of capital flowing into "bottom-up" opportunities such as perpetual swaps, token issuance platforms, prediction markets, and new forms of DeFi. The remaining two-thirds are targeting "top-down" areas, including DATs, real-world assets (RWAs), exchange-traded funds (ETFs), and companies entering the public markets. These public market assets have dominated this cycle, which in turn has increased access to crypto assets to the broader public, a very healthy sign for the industry. This balance suggests a maturing market that prioritizes both innovation and integration with traditional finance. A blueprint for crypto legislation needs to be developed in the near term, and given the current administration's support for cryptocurrencies, this window exists before the 2026 midterm elections. The DeFi Education Fund, which aims to protect software developers, submitted a response to the Senate Banking Committee's request for information on digital asset market structure and recently released a discussion draft of the Responsible Financial Innovation Act of 2025. Last week, the 2025 Wyoming Blockchain Symposium focused on digital asset regulation, highlighting the urgency of establishing clear crypto regulations in the United States and the need for a balanced market structure. Members of the current administration attended the symposium, which aims to promote forward-looking regulation. As we enter the first quarter of 2026, we can expect a more solid regulatory foundation than ever before, especially given the tight timeline. The Token Listing and IPO Market Reopens Token listings declined in 2025, and fewer of these new tokens achieved profitability, putting downward pressure on deal flow. Projects relying on token issuance found it more difficult to secure funding without market traction. In contrast, the IPO market reopened, with 95 companies having gone public in the US by mid-June 2025, raising $15.6 billion, a 30% increase from 2024. Cryptocurrency-related IPOs, including Circle and BitGo, led this trend, as investors began to allocate funds to cryptocurrency stocks rather than tokens. Circle went public on June 5, 2025, pricing its shares at $31. By mid-July, its price had risen to $233, representing a return of more than five times its value, bringing its market capitalization to $44.98 billion. Figure and Bullish also recently went public, with Bullish becoming the first company to raise $1.15 billion through a stablecoin offering. Cryptocurrency companies are now prioritizing revenue and growth over speculative token issuance. The surge in cryptocurrency IPOs and other "top-down" operations is attracting traditional investors through stable, revenue-driven business models, rather than the volatility of cryptocurrencies themselves. This is just the beginning of IPOs, with many more lining up for listing in the coming months. Acquisitions and Industry Maturation 2024 was a record year for mergers and acquisitions, with over 100 deals totaling $1.73 billion, and 2025 is expected to surpass that figure. From January to July of this year, 76 deals totaling $6.23 billion were completed, 3.6 times the total for 2024. At the current pace, the number of deals for the full year is expected to reach 130. The strong momentum in 2025 reflects more the industry's natural maturation than the release of pent-up demand. Strategic acquisitions like Robinhood's acquisition of Bitstamp demonstrate that established players are building integrated platforms. Robinhood's multi-billion dollar bet on the future of cryptocurrencies further bolsters the ecosystem's credibility. Its cryptocurrency revenue surged 98% year-over-year to $160 million in Q2 2025, while overall company revenue grew 45% to $989 million, with profits of $386 million. Robinhood's adoption of blockchain technology, a pillar of its retail-oriented stock trading, highlights the shift toward mainstream, regulated infrastructure. Similarly, late-stage deals like Securitize's $400 million funding round from Mantle in Q2 2025 for RWA tokenization and Kalshi's $185 million funding round at a $2 billion valuation for prediction markets highlight the focus on revenue-driven, regulatory-compliant models. These initiatives reflect the cryptocurrency industry's focus on collaborating with traditional financial institutions, rather than simply pursuing speculative opportunities. Cryptocurrency no longer exists in isolation; it is merging with today's cutting-edge technologies and global finance. In the field of artificial intelligence, OpenMind's OM1 + FABRIC architecture addresses the "missing layer" problem in the robotics industry, enabling diverse robots to work together in a decentralized manner. Worldcoin's iris scanning authentication system leverages a blockchain-based identity layer to enable AI agents to authenticate and transact autonomously, addressing a key challenge in secure cryptocurrency interactions. Decentralized AI platforms like Sahara AI (a decentralized alternative to Scale AI) and Sentient (a decentralized Hugging Face) are disrupting traditional AI infrastructure. The application layer of cryptocurrency AI is still in its very early stages, but its potential could create a new market structure through on-chain agents and trading systems, enabling high-frequency trading of tokenized stocks. In the payments sector, stablecoins, particularly Circle's USDC, have become an integral part of the global payment system, and the passage of the GENIUS Act has further accelerated USDC's adoption. Circle reported a 58.6% revenue increase to $579 million in the first quarter of 2025. Analysts estimate that stablecoin daily trading volume could reach $250 billion within three years, and if growth continues, could even surpass traditional payment systems like Visa within the next decade. Companies like PayPal and Visa are exploring the integration of stablecoins, integrating them into mainstream payment channels. Robinhood's partnership with Arbitrum allows Robinhood users to trade USDC directly on Arbitrum, making stablecoin trading more accessible to everyday users. This partnership with Robinhood is just the tip of the iceberg; Arbitrum plays a key role in expanding stablecoin adoption and demonstrates how Layer 2 solutions are connecting cryptocurrencies with traditional finance.
These most critical industries converge here, bringing together experts from AI, fintech, and consumer tech, blurring industry boundaries. Cryptocurrency, as the backbone of decentralized systems, is establishing itself as a critical layer in the global technology architecture.
Looking Ahead
We expect a stronger market cycle in Q4 2025 and Q1 2026. Unprecedented regulatory clarity, expected interest rate cuts, and significant capital inflows from strategic M&A and IPOs are creating a solid foundation. This renewed momentum, driven by a focus on practical applications, sets the stage for a period of accelerated growth. Our strategy is to capitalize on this opportunity by making concentrated, high-conviction investments in Series A companies poised to define their sectors.
The US IPO market has surged to 224 IPOs so far this year. In the first half of 2024, there were 94 IPOs, compared to 165 in the first half of 2025, a 76% increase. In the first half of 2025 alone, there were 185 cryptocurrency-related transactions, which is expected to exceed the 248 acquisitions in 2024. Acquisitions of cryptocurrency companies by well-known companies like Circle and traditional financial giants signal the strong momentum of the upcoming cycle. The integration of cryptocurrency with artificial intelligence, payments, and infrastructure, coupled with favorable regulations and investor enthusiasm, will propel us into an era of accelerated growth. Against this backdrop, we will continue to consolidate cryptocurrency's position as a pillar of global finance and technology.
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