In a “convenient” bear market, cryptocurrency mergers and acquisitions skyrocketed by more than 200% in 2018.

In what has been dubbed “deal frenzy,” cryptocurrency and blockchain-related merger and acquisition (M&A) activity increased by more than 200 percent in 2018, CNBC reported on October 18.

Data collected by JMP Securities for PitchBook shows that by the end of this year, the total number of M&A transactions in the industry will reach 145, of which 115 have already been finalized as of October 15.

The data covers a wide range of M&A transactions, including majority investments, partial acquisitions and full acquisitions. While the size of the deals remains undisclosed, CNBC quotes JMP as saying that “most” are “relatively small” – less than $100 million – and are “global in nature.”

According to CoinMarketCap data, the biggest increase occurs when the price of Bitcoin (BTC) is almost 53 percent lower than at the beginning of the year.

Conversely, in 2017, only 47 transactions were reportedly made in total, and Bitcoin’s price surged, reaching a record high of $20,000 in December of that year.

Satya Bajpai, head of investment banking at JMP Securities, told CNBC in an interview that the so-called “crypto winter” is an opportune time for those who want access to innovative technologies, intellectual property and talent in the emerging space.

Bajpai further suggested that the downturn in Bitcoin is driving down prices across the market, arguing that:

“You see asset mispricing. Even for large companies, the value of the token remains correlated to Bitcoin, which could create an ideal opportunity for strategic buyers.”

Bajpai further characterized the increased transaction activity as a kind of “land grab” in which the rapid pace of innovation in the sector pushes parties to choose to buy rather than start from scratch:

“(The M&A route is) expensive, but you get the technology and the product immediately. This industry is like a treadmill – the only way to keep up with the treadmill is to run by investing in new technology.”

Moreover, M&A offers a shortcut to accessing an existing user base or community, Bajpai suggests, contributing to the belief that M&A deals are “the most viable and fastest way to grow” in a new space.

Nevertheless, there are specific “challenges” posed by the new sector, he added: while initial coin offerings (ICOs) tokenize incentives, ownership or shares in a developing platform or service, institutional investors may prefer to purchase traditional shares of a given project’s equity rather than invest in the associated token.

Other commentators expressed similar views that a bear market is seen as a favorable time for institutions to enter this space; venture capitalist Garry Tan commented on Twitter earlier this month he argued that “crypto winter (…) makes it safer for very long-term institutions based on the Yale model to enter at a price that is not dangerous.”

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