Cryptocurrency mergers and acquisitions are expected to surge during a second Trump presidency.
Former President Donald Trump is scheduled to return to the White House in January after winning Tuesday’s presidential election. During his campaign, Trump made several promises to the cryptocurrency community, one of which was to fire Securities and Exchange Commission (SEC) Chairman Gary Gensler on his first day in office.
About a half-dozen merger advisers and venture capitalists believe Trump will deliver on his promises to Gensler, which have been subject to years of regulatory enforcement. Experts also believe Trump could pave the way for more favorable cryptocurrency regulation.
In light of these looming changes, merger advisors and venture capitalists told Bloomberg they expect cryptocurrency mergers and acquisitions deals to pick up pace next year.
Casper Johansen, head of The Spartan Group’s digital asset advisory practice, said:
“With Trump in the White House, we expect 2025 to be an even stronger year for negotiations.”
Trump’s victory and the change in SEC leadership will allay fears that deals will be blocked or business channels will be declared illegal or subject to legal action by the SEC, according to Haseeb Qureshi, managing partner at Dragonfly Capital.
Some investment bankers focused on digital assets said they expect many CEOs to use acquisitions to accelerate expansion plans under a second Trump presidency.
Some cryptocurrency companies that have revealed trading plans include brokerage FalconX and Tether, which operates the largest stablecoin. In June, Tether said it would invest $1 billion in trading over the next 12 months.
There’s also Stripe Inc., a fintech company valued at about $70 billion, which last month announced plans to acquire stablecoin startup Bridge for about $1.1 billion.
Some obstacles will remain.
U.S. regulatory and SEC uncertainties were not the only challenges in executing merger and acquisition transactions. The main reason deals fail is because buyers and sellers cannot agree on a valuation for the company.
Most cryptocurrency companies raised funds during the bull market, which ended in 2022. This means that their last funded valuation is significantly higher than the current market. If the buyer and seller cannot reach an agreement, the transaction fails.
But Qureshi said:
“All things considered, I expect the next four years to be much more favorable than the past four years.”