Global investment in cryptocurrency companies fell to $14.2 billion in the first half of 2022, down from a record $32.1 billion last year, a slowdown that is expected to continue according to a report by global audit and advisory firm, KPMG.
The maturity of the industry
“Although the cryptocurrency space collapsed significantly by mid-Q1 2022, due to the unexpected Russia-Ukraine conflict, rising inflation and the challenges caused by the fall of the Terra ecosystem, mid-year investment remained well ahead of the years prior to 2021,” KPMG noted in its report, adding: “This highlights the growing maturity of the space and the breadth of technologies and solutions that are attracting investment.”
The top deals of the first half of 2022
The top deals closed in the first half of the year were:
- Venture capitalists who put $550 million into the cryptocurrency custodian,
- Fireblocks, the $450 million to the infrastructure construction company,
- Ethereum ConsenSy and $400 million on the cryptocurrency exchange FTX.
What to be expected for the second half of 2022
In the second half of the year, KPMG expects investors to move away from companies offering currencies and non-exchangeable digital assets (NFTs) and into blockchain infrastructure projects, particularly those involving the use of blockchain to update financial technology.
KPMG sees a growing focus on products related to compliance and transaction traceability and increased corporate interest in stablecoins as a lower-risk route to investing in cryptocurrencies.
In addition, KPMG predicts that well-managed cryptocurrency companies with sound risk and cost management strategies will survive the downturn, while the resilience of other cryptocurrency companies will be tested very hard as some look to recapitalize at lower valuations.
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