Download the full report above.
State of the Crypto Markets: Crypto Solid but Macro Headwinds?
Three months ago our Q4 2024 report started with: “The U.S. elections and the associated expected shift in the U.S. regulatory stance have changed everything.”
That remains true, however, we have a newly introduced macro theme: economic and foreign policy uncertainty driven by tariffs and the potential reshuffling of global alliances. We write this hours after the U.S. administration revealed its tariff plans. Only time will tell the impact of these dynamics as well as the ability to advance constructive crypto legislation in the U.S.
We remain cautiously optimistic as both crypto M&A and private financing have trended upward in Q1 2025.
Our 2024 Year-End Crypto M&A and Financing Report is linked here for your reference.
Q1 2025 CRYPTO HIGHLIGHTS
Mergers & Acquisition Activity Up Strongly
M&A activity in Q1 2025 is even stronger than Q4 2024, again reaching a record level of transactions and hitting an all-time high in announced consideration paid. Strategic, high-value M&A is beginning to reemerge, with Kraken’s $1.5B acquisition of NinjaTraders being the marquee deal and we also count six transactions above $100M.
Private Financing Activity Also Building
Private financing activity and investment capital also rose in Q1 2025. Seed and early stage continue to dominate deal flow, however, most of the consideration this quarter was tied up in growth stage financings. This is a positive sign for the industry, as the fundamental prerequisites for growth stage equity are strong financial performance and relative maturity. This exists so we anticipate further growth in this segment of the financing market.
Public Markets Demonstrate Crypto Volatility
The Architect Partners Crypto Index rose 50% in 2024 and gave up roughly half of that in Q1 2025. For context, Bitcoin declined 10% in Q1 while our index of public companies fell 23%. Trading volume, the lifeblood of many in our index, declined 25%. Circle’s IPO S-1 became public as we write this and large capital raises, mostly via convertible debt instruments, for both Bitcoin mining expansion and speculative purchase of Bitcoin for treasury holdings continued unabated from last year’s pace.
STRATEGIC THEMES ARCHITECT PARTNERS IS TRACKING
To keep us honest let’s see how Q1 demonstrated our themes presented in our year end report.
Crypto Has Delivered Exceptional Value Creation
- Q4 Statement: Crypto has attracted $130B of risk capital which today represents $3.4T in value and 25x returns, much better than traditional venture investing. This far outpaces the Internet at the same point in market development.
- Q1 Progress: Our 2025 update to Family Ties was published on February 13th. Q1 2025 ended with $2.8T in value (vs. $3.4T) but the fundamental point remains: crypto investment returns have been exceptional.
Initial Public Offerings are Coming
- Q4 Statement: Numerous companies are on that track but 2026 may be stronger than 2025.
- Q1 Progress: Circle just released their S-1 and Amber Group debuted on the NASDAQ.
Leverage Is Quickly Returning
- Q4 Statement: Is leverage friend or foe this time?
- Q1 Progress: Friend so far, with risk management high priority. Data is difficult to compile but we see significant growth in both collateralized and uncollateralized lending.
Mergers & Acquisitions – It’s Time for Urgency
- Q4 Statement: Traditional financial services companies are entering crypto, a potentially existential competitive threat to some crypto-native players. Both will be spurred into action.
- Q1 Progress: Legislation is important for action but traditional financial services players are already re-engaging in preparation.
Moving Beyond Speculation – An Important Next Step
- Q4 Statement: Stablecoins are proving to be a real-world use case, with businesses and consumers partaking. Other use cases with both viability and scalability remain unclear.
- Q1 Progress: The payments use case is also taking root. More from Architect Partners soon.
Eric F Risley
Founder & Managing Partner
April 3, 2025