KPMG: Investor Interest in Crypto Remains Strong Despite Market Downturns
KPMG has revealed via its Pulse of Fintech H1’22 report released on September 6, 2022, that investor confidence in bitcoin (BTC) and other cryptocurrencies have remained solid during the first half of 2022, despite the bear market and the gloomy economic conditions globally.
Crypto Continues to Attract Investors
While the combined market capitalization of bitcoin (BTC) and altcoins has crashed well below the more than $3 trillion mark hit last November, no thanks to the sustained bear market and a series of unfortunate events, including the recent Terra debacle, a fresh research report by KPGM shows that investor interest in the crypto space remains solid.
In its Pulse of Fintech H1’22 report, KPMG, a multinational professional services network and one of the Big Four accounting organizations, revealed that even though the total number of global investments in the crypto space dropped massively from the levels reached in 2021, digital asset investment deals executed in mid-2022 still managed to surpass that of previous years, excepting 2021.
Per the report, in 2021, a total of $32.1 billion was pumped into the crypto and blockchain space via 1,583 deals. However, in the first half of 2022, the crypto space attracted just $14.2 billion with 725 deals. Though the performance of 2022 appears to be a far cry from the milestones reached in 2021, the value still dwarfs the $5.3 billion and $5.7 billion seen in 2019 and 2020 respectively.
Crypto Industry Maturing
KPMG stated: “After a record-shattering 2021, global investment in crypto and blockchain fell to $14.2 billion during H1’22. Despite the crypto space collapsing significantly since mid-way through Q1’22 due to the unexpected Russia-Ukraine conflict, rising inflation, and the challenges experienced by the Terra crypto ecosystem, investment at mid-year remained well above all years prior to 2021.”
The researchers further noted that the sustained growth is a strong indication that the crypto and blockchain space is steadily maturing, with developers now building products that are useful and investment-worthy.
“This highlights the growing maturity of the space and the breadth of technologies and solutions attracting investment. During H1’22, the largest deals in the space came from VC raises, including a $1.1 billion raise by the Germany-based Trade Republic, a $550 million raise by US-based Fireblocks, a $500 million raise by Bahamas-based FTX, and a $450 million raise by ConsenSys,” added KPMG.
While the crypto winter of 2022 has already succeeded in rendering a good number of crypto market participants bankrupt, KPMG predicts that more crypto projects may kick the bucket in the second half of 2022, while some will try to raise more funds to sustain their operations.
The researchers have also predicted increased interest in stablecoins from institutional investors “looking to gain the operational advantages of crypto, including costs, delays, visibility, liquidity, and ease-of-use.”
In the same vein, the researchers also noted that the adoption of bitcoin (BTC) as legal tinder by El Salvador last year has led to an increase in the use of cryptocurrencies ‘in order to support crypto sovereignty” and limit the U.S. dollar’s monopoly. With the Central African Republic recently becoming the second nation to make bitcoin legal tender, KPMG says the trend will continue in H2’22 and beyond. At the time of writing, bitcoin (BTC) is trading at around $18,770.
