The amount of money invested in cryptocurrency and blockchain assets is already double the amount put into the market in 2020, according to a report from KPMG.
The accountancy giant’s ‘Pulse of Fintech’ report for the first half of 2021 noted “rising interest in cryptocurrencies and blockchain – not only from startups and investors, but also from governments and regulators”.
Between January and June, the report noted a total of 548 investments into the blockchain and crypto sector through venture capital, mergers & acquisitions and private equity, which altogether carried a value of US$8.7bn, up from US$4.3bn in 2020.
The report noted that as the sector had matured, so had the nature of its investors, with the first half of 2021 seeing a “significant amount of institutional money” flowing into the crypto space, which it said highlighted a broadening of its investor base.
Venture capital investment, in particular, had been “very strong” in the space, with numerous companies raising over US$100mln in funding rounds during the six months.
“Investor awareness and knowledge of the sector is growing, with investors now having a much better understanding not only about crypto assets, but also the operational and procedural side of crypto — from custody and storage to storekeeping and the competitiveness and maturity of service providers,” KPMG said.
Looking ahead to the second half of the year, the report said trends to watch for included a “stronger separation between cryptocurrencies and the use of blockchain technologies”, as well as more focus on regulatory framework developments in the space and the evolution of exchanges focused on other digital assets such as non-fungible tokens (NFTs).
“Cryptocurrency and blockchain is exploding globally. There’s so much happening in the space right now… Digital currencies and virtual assets are a big, big topic of conversation. I think for the rest of this year at least, crypto will be a very hot ticket for investors,” said Anton Ruddenklau, KPMG’s global fintech co-leader.