June 1st – June 7th

PERSPECTIVES by Eric F. Risley 

Mergers with Special Purpose Acquisition Corporations (SPACs) have proven to be a challenging path. As an M&A practitioner, this pains me to say, but data bears out these challenges.  

Within the crypto | digital assets industry, 20 transactions were announced since 2020; however, only nine have been completed. Most notably, Circle, Bullish and eToro all chose to abandon their planned transactions and proceed with a traditional IPO.  Completed transactions include Bakkt, Core Scientific, Bitdeer, Coincheck, Cipher, Bitcoin Depot, Greenidge Generation, Griid Infrastructure, and CoinShares. Only Bitdeer, Core Scientific and Cipher are trading above their SPAC offering price, all having transitioned to focus on AI data-center operations from Bitcoin mining. 

More broadly, transactions involving financial technology businesses have demonstrated similar performance with more than two dozen completed transactions since 2020. Only SoFi trades above its SPAC offering price.

We remain hopeful that Securitize (soon to close) and this week’s announcement of OpenPayd will be well received. Both are entering the market with strong macro trends supporting tokenization and payments, respectively.

Traditional IPOs deliver underwriter sponsorship and longer-term support, a market-set valuation upon debut, breadth of institutional investor participation and the benefits of global investor solicitation. SPACs generally lack these benefits and have a further structural challenge of practically requiring a complete turnover of shareholders following the close of the transaction, a particularly sensitive time period of credibility building. Standouts do occur, but of all SPACs since January 1, 2020, 83% are trading below their offering price. 

May 25th – May 31st

PERSPECTIVES by Eric F. Risley 

The missing potential.

Only two years ago, Chris Dixon published Read Write Own, a perfectly titled vision of the potential of blockchain technology and its associated features like tokens. The thesis is elegant and intriguing. Simply put, blockchains represent a network of dedicated computers which can be used by anyone, on demand, without permission, for nominal cost. 

Chris framed this as the third generation of the Internet. First generation represented companies (think AOL, Yahoo, Google) who allowed “read” of a vast corpus of content. In the second generation, a network of users created the value (“write”) by directly contributing and consuming personally created content and assets (think Facebook, eBay, GitHub, Medium, Twitter, Uber). These first two generations created trillions of dollars of equity value but zero direct financial value was shared with users.

The third generation, variously described as Distributed Applications (DApps), Web3, Blockchains, Blockchain Networks or simply Crypto, represents the promise of empowering users as owners with the economic value being shared (“own”).

Our data suggests that over $63 billion has been invested to make this third generation a reality. Yet the consumer promise, that user ownership would build more engaged communities and, in turn, more valuable platforms, has yet to produce a breakout. This week’s M&A activity illustrated the gap. GAMEE, a social Web3 gaming platform once majority owned by Animoca Brands, sold a controlling stake to Alpha Compute for up to $11M, valuing the company at roughly $18M. Against GAMEE’s claimed 120M+ registered users, that is about $0.15 of company value per user, compared to roughly $521 per user for Facebook. And what little value exists still accrued to shareholders rather than users, the very outcome the “Own” thesis set out to change.

Having personally lived through and participated professionally in the building of all three eras of the Internet, the vision remains viable but as so often, the catalyst is opaque and only obvious in retrospect. Chris’s thesis is absolutely sound but remains far more hope than reality, so far…

Stablecoins are starting to look like the settlement medium for a new kind of programmable financial infrastructure, one built around software rather than humans. AI agents are the clearest near-term example. Traditional payment rails assume a person somewhere in the loop: card entry, invoices, approvals, wires, batch windows, business hours. Autonomous software needs something different. It needs settlement in seconds, transactions worth a fraction of a cent, wallets that can enforce spending limits and compliance rules on their own, and an audit trail by default. Stablecoins fit because most of those properties come from the blockchain underneath, not from the dollar itself. Settlement is final in seconds. Smart contracts enforce policy without an intermediary. Low-fee chains like Base and Solana make sub-cent transactions economically viable. The ledger never closes and is auditable by default.

Two public-market companies are already executing the shift from complementary angles. Circle is approaching it from the issuer side. On May 11, Circle announced Agent Stack, positioning USDC as the settlement layer for AI agents by pairing agent wallets and policy controls with nanopayments through Circle Gateway, including gas-free transfers as small as $0.000001. The design only makes sense if the primary user is software; sub-cent, gas-free transfers are not features human users need, they only become useful at machine velocity. Circle is the only public-market stablecoin issuer building an explicit AI-native stack at scale, which positions USDC as the leading issuer-side candidate as the agent economy develops.

Coinbase is approaching the same opportunity from the developer side. On May 7, Coinbase and AWS announced Amazon Bedrock AgentCore Payments, integrating Coinbase’s x402 discovery protocol and wallet infrastructure now sit inside Amazon Bedrock AgentCore Payments, letting AWS developers build agents that find services, pay in tiny amounts and settle instantly in USDC on Base or Solana. What matters here is distribution: most blockchain payments infrastructure has lacked a real channel to mainstream developers, and the Bedrock integration puts Coinbase’s stack in front of where agents are actually being built. Combined with ownership of Base and the wallet layer, the result is the closest thing in public markets to a full-stack AI-native payments platform. Between Circle and Coinbase, the operating layer for agent settlement is increasingly being built and owned inside public crypto companies.

The regulatory side is starting to move too. On May 11th, Augustus, still private, has received preliminary conditional OCC approval for a branchless national bank focused on stablecoin and AI-native clearing. It is an early signal that this kind of architecture is being taken seriously inside the regulated banking perimeter.

The bigger point is that the next phase of stablecoins is less about faster dollar rails and more about being embedded directly into software workflows. For public crypto companies, the prize is not just issuing stablecoins or facilitating stablecoin trading. It is owning the infrastructure that lets software discover services, pay, settle and enforce controls on its own. If AI agents become real economic actors, stablecoins are likely to be one of their primary settlement assets.

May 18th – May 24th

PERSPECTIVES by Eric F. Risley 

Another milestone week for crypto | digital assets.

The first acquisition of a crypto | digital assets business by a Global Systemically Important Bank (GSIB) was announced this week. This is likely the first of many similar transactions to come, driven by growing regulatory certainty, as highlighted in last week’s M&A Snapshot.

First rumored by Bloomberg in early April, Standard Chartered Bank (SC) this week announced that its non-binding offer to acquire Zodia Custody (ZC), a digital asset custodian backed by SC Ventures (SCV), has been accepted by the shareholders and noteholders of Zodia Custody. ZC’s regulated custody activity will be integrated into SC’s existing digital asset custody Financing and Securities Services business.

As part of the transaction, ZC will separate its institutional digital asset infrastructure platform into a newly formed independent entity, Zodia Solutions, housed under SC Ventures. Zodia Solutions will continue to provide bank-grade infrastructure to financial institutions, including Standard Chartered, supporting them as they launch and scale digital asset services. The new entity will be backed by a consortium of bank investors, including several existing Zodia Custody shareholders, reinforcing the bank-grade infrastructure model underpinning the platform.

A recent interview with Zodia Custody CEO Julian Sawyer, offers an overview of ZC’s business and a viewpoint on the current state of crypto and digital asset safekeeping.

May 11th – May 17th

PERSPECTIVES by Eric F. Risley 

A post-Consensus Conference lull this week brought only two announced transactions. However, far more important was progress on the CLARITY Act.

Pantera’s Paul Veradittakit published a solid overview of the week’s happenings and why this matters. History teaches us that regulatory frameworks are what we call a “primary ingredient,” along with capital and entrepreneurship, in allowing an industry to fully develop. The EU’s MiCA, the UAE’s VARA, Singapore’s MAS, and Zug’s early efforts in 2018 were important precursors. However, without the full support of the US financial system, capital markets, and deep culture of innovation, too many questions remained unanswered.

The relatively recent passage of the STABLE Act has propelled the beginnings of widespread acceptance and a strategic embrace of stablecoins as a legitimate form of payment. Since then, and in anticipation of that regulatory clarity, 33+ M&A transactions have emerged relating to the promise of “re-plumbing” global payments. This includes five transactions (most notably BVNK | Mastercard and Bridge | Stripe) where traditional payment and stablecoin payment companies have merged, or “bridge transactions” in our language.

The CLARITY Act is far more substantive and, if passed into law, will trigger a far larger strategic imperative, which will translate partially into M&A. Virtually every financial services business globally will be impacted, including banking, securities, payments, and other industries where a “single source of truth” can replace multiple proprietary versions that require constant reconciliation.

The CLARITY Act is most like the Securities Act of 1933 and the Exchange Act of 1934, which established the regulatory guidelines that created the largest and most trusted capital markets globally. Other comparable regulatory actions that reshaped financial services and drove M&A include the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, which allowed interstate banking, and the repeal of Glass-Steagall, which had separated banking and non-banking financial services. There are plenty of other examples within and outside of financial services that demonstrate that regulatory clarity often drives strategy and industry-shaping M&A.

Q1 showed which crypto business models hold up when prices fall and which do not.

Miners were hit hardest for three reasons. Bitcoin dropped sharply, so each coin mined earned less while energy, hosting, and equipment costs stayed roughly the same (Q1 was predominantly pre-Iran War). Network difficulty stayed high, so unit economics worsened even where output held. Large Bitcoin balances also drove accounting losses through earnings, on top of weaker operating results. 

Trading platforms split by customer type. Industry volumes fell as volatility cooled and investors pulled back. Retail-heavy venues took the brunt: Coincheck saw revenue, volume, and customer assets all decline. Coinbase revenue also fell, but it gained market share and doubled DEX volume, showing that despite the down quarter it was faring better than its peers. Bullish, which serves mostly institutional and derivatives clients, held revenue flat as that base kept trading through the quarter: institutional and derivatives flow runs on mandates and hedging rather than the discretionary risk appetite that pulls retail away when prices fall.

Stablecoins and tokenization held up best because their revenue comes from usage, not trading. Circle’s earnings softened on lower interest income, but USDC circulation grew and on-chain transaction volume nearly doubled, showing real payments demand. Figure showed the same pattern, with tokenized consumer credit volume rising and newer products scaling quickly.