Token-Based M&A Deals Face Growing Hurdles As Crypto Firms Seek Survival Options
Token-based mergers and acquisitions (M&A) are emerging as a complex yet necessary path for crypto-native companies navigating uncertain market conditions.
That’s according to speakers at a panel discussion during the most recent Benzinga Future of Digital Assets conference. Industry leaders emphasized that while token funding provides quicker liquidity, it complicates buyouts, with valuations often plummeting during negotiations.
Token Valuations Under Pressure
Elliot Chun, partner at Architect Partners, pointed out the critical challenges firms face in token-based M&A deals, where expectations frequently clash with reality. “You better walk into that discussion knowing that your token is going to trade from zero to a 75% discount at best,” Chun said. Founders often overestimate the value of their tokens, he explained, and struggle to align those valuations with potential acquirers.
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Chun noted that token holders’ belief in their assets’ “special” value further complicates negotiations. When …
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