Crypto industry is ‘maturing’ but expect slowed growth in second half KPMG

The cryptocurrency market is maturing, but investment in the sector is expected to continue to decline in 2022, according to financial giant KPMG. report.

According to the report, global investment in cryptocurrencies in the first six months of 2022 reached $14.2 billion from 725 transactions. By comparison, $32.1 billion was invested in the industry during the same period in 2021.

KPMG believes that the record market crash experienced by the industry due to the unexpected Russian-Ukrainian conflict, rising inflation, and challenges experienced by the Terra crypto ecosystem has led to the growth of the space and its solutions to attract investment. It shows that it continues to attract.

However, the crypto space could be quieter in the second half as the nature of investors is changing.

KPMG said:

Prior to 2018, most cryptocurrency investment came from retail consumers. Since then, the investor profile has changed, with institutional and corporate investors accounting for a larger share of investment.

The global financial firm also highlighted how the performance and risks of cryptocurrencies currently correlate with traditional assets. Current market conditions will test crypto assets, especially Bitcoin (BTC), according to KPMG.

Bitcoin’s recent price performance correlates with that of other traditional assets.Recent IMF reports clearly There is a growing correlation between Asian stock markets and crypto assets such as Bitcoin and Ethereum (ETH).

For more information, the flagship digital asset has lost 5.9% of its value in the last 24 hours, while the Nasdaq, S&P 500 and Dow have fallen similarly, albeit at much lower rates, during this period. .

With this in mind, KPMG predicted a slowdown in cryptocurrency investment especially from retailers offering coins, tokens and NFTs. However, given the focus on the use of blockchain in modernizing financial markets, investments in cryptocurrencies and blockchain infrastructure could weather the recession.

Alexandre Stachtchenko, director of blockchain and crypto assets at KPMG France, said he expects some crypto assets to disappear, especially in companies that do not have a clear and strong value proposition. Long term, this is good for the ecosystem. The best companies will survive. “

A KPMG report shared the same view. The company wrote that “well-managed crypto companies with sound risk management policies, long-term vision, and strong cost and risk management approaches” will survive the second half.