3 crypto-market trends to look out for this year, according to PwC

2021 03 23T153223Z_1_LYNXMPEH2M171_RTROPTP_4_FIDELITY CRYPTOCURRENCY.JPG
Bitcoin’s meteoric rise has boosted crypto hedge funds

  • Cryptocurrency M&A is expected to have a stellar 2021, according to PwC, after the value of M&A deals in the space doubled year over year in 2020.
  • The firm revealed that the average M&A deal size jumped by 174% from $19.2 million to $52.7 million in 2020.
  • PwC outlined the three trends to expect in the crypto space in 2021.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell

Mergers and acquisitions will be a big theme in the cryptocurrency space, according to PwC, after the value of M&A deals in the sector doubled year over year in 2020.

In a report published on Monday, the Big Four accounting firm revealed that the average M&A deal size jumped by 174% from $19.2 million to $52.7 million, with four deals valued at more than $100 million in 2020. The firm also revealed that transactions are shifting away from the Americas, with 60% occurring in Asia and Europe compared to 2019.

Transactions, according to PwC, are also more spread out across categories.

“With increasing interest in crypto from retail and institutional investors following the positive market momentum, it is not surprising to see increase M&A in the broader train sector,” the report said.

The report comes amid a rapid rise of interest in the cryptocurrency space, with bitcoin, the most popular digital asset, rising 600% in the past year alone. While many bitcoin bears continue to criticize cryptocurrencies, many advocates are expecting the boom to continue amid rising interest from both retail buyers and institutions.

The UK-based firm, in the report, then outlined the three trends to expect in the M&A activity in the crypto space across the globe after a record-breaking 2020.

Crypto M&A will be be driven by large players

PwC said it expects to see further consolidation in the industry with larger, well-funded, and profitable firms seeking to continue their M&A activities. “We expect the focus to be not on the acquisition of smaller competitors but rather of firms that offer ancillary services to their current offering,” the report said, referring to crypto media, data, and compliance research.

Institutionalization of the crypto industry will continue

The firm said it predicts a steady continuation of institutionalization of cryptocurrencies, driven by the rally in the price of the digital tokens as well as heightened media attention on central bank digital currency (CBDC), stablecoins, decentralized finance (DeFi), and non-fungible tokens (NFTs). PwC said all these will serve as catalysts to more institutions wanting to enter the space through investing or acquiring.

M&A, as well as fundraising, will increase

Based on the bull market in the first quarter of 2021, PwC said it expects the number and value of M&A deals to increase this year. It also said it sees more activity comeing from Asia-Pacific and EMEA reagions.

Read the original article on Business Insider

Bank of America, KPMG, Mastercard, and some 60 other top companies adopt new ESG metrics

Brian Moynihan, the chief executive of Bank of America.
Brian Moynihan, the chief executive of Bank of America.

  • Some 60 major companies have agreed to adopt a new ESG reporting framework. 
  • ESGs are metrics that measure a company’s environmental, social, and governance progress. 
  • The effort is being led by the World Economic Forum and the International Business Council, run by Bank of America CEO Brian Moynihan. 
  • Visit Business Insider’s homepage for more stories.

Executives from Bank of America, Mastercard, KPMG, and about 60 other large companies announced Tuesday they’ll be adopting a new reporting framework for environmental, social, and governance standards (ESGs) in partnership with the World Economic Forum. 

Other companies that have signed on to this reporting framework include Salesforce, Unilever, Dell, and Sony. 

ESG standards are a set of criteria used to measure a company’s performance on things such as how the company is impacting the environment (like its amount of toxic emissions), how it manages relationships with its employees (does it encourage employees to volunteer), and how the company runs internally (boardroom diversity).

If widely adopted, these standards, called “Stakeholder Capitalism Metrics,” have the potential to transform what it means to operate a large corporation. It could make it standard procedure for a major company to report its ESG metrics, just like it’s standard (in fact, required) for a company to report on its financial metrics. 

Many in the business community see ESG metrics as a concrete way to advance stakeholder capitalism, the leading economic theory today that says companies are responsible to all stakeholders, including their employees, customers, the environment, as well as their shareholders. 

“We have to deliver great returns for our shareholders and help drive progress on society’s most important priorities,” Brian Moynihan, CEO of Bank of America, and chairman of the International Business Council, said in a statement. “That is stakeholder capitalism in action.”

The next step in a trend

In September, the World Economic Forum and the International Business Council (IBC), run by Bank of America CEO Brian Moynihan, partnered with “the Big Four” accounting firms to create the reporting framework of 21 ESG standards. The big four – Deloitte, PwC, EY, and KPMG – provide financial auditing and other professional services. 

Insider recently spoke with Klaus Schwab, World Economic founder and executive chairman, about the more than 60 companies signing on to these metrics. 

“At the moment you have a situation where a company reports mainly about their intentions. Now we have to walk the talk,” he said. 

Read the original article on Business Insider