KPMG study: Crypto and blockchain investments doubled 2020 value

According to a new KPMG report, cryptocurrency and blockchain investments continue to grow thanks to ever-rising investor interest and have already doubled the value since 2020. Investors now have a better understanding of crypto assets and the operational and procedural side of crypto, a report claims.

The study, titled “Pulse of Fintech H1 2021,” covers global investment activities in different financial technology verticals for the first half of 2021. It details 2,456 investment deals worth $98 billion made from January to June. One of the top fintech trends of the year is the explosive growth in crypto and blockchain investments, the report says.

For the first six months of this year, there was made 548 investments deals, including venture capitals, private equities, and mergers and acquisitions in the blockchain and cryptocurrency sectors. The total value of investments for this period reached $8.7 billion, which is already doubled the total value of 580 investments made in 2020 with $4.3 billion worth.

Leading in the growth of investment volume companies, such as BlockFi, Paxos, Blockchain.com, and Bitso, raised more than $100 million in funding rounds in total.

“Cryptocurrency and blockchain are exploding globally,” noted Anton Ruddenklau, KPMG global fintech co-leader. “There’s so much happening in the space right now between the eCNY project running in China, Facebook’s Diem, a number of ecosystem initiatives — not to mention all the different trading platforms raising money. 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.”

KPMG study points to rising investor awareness as a key driver of investment growth. Investors now have “a 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.”

The report predicted that the cryptocurrency space would continue to mature while the differentiation between cryptocurrencies and blockchain technologies would get stronger. Non-fungible tokens (NFTs) will contribute to the evolution of crypto exchanges in the form of NFT-focused trading platforms.

KPMG expects a further focus on regulatory frameworks till the end of the year. In one special case, if India should regulate cryptocurrencies as an asset class in the second half of 2021, it will impact the whole crypto ecosystem.