Audit giant KPMG predicts what’s to come for crypto and blockchain in the second half of 2022
A new report from global auditing giant KPMG predicts an upcoming decline in crypto investments during the second half of 2022.
According to KPMG’s Pulse of Fintech H1’22 report, crypto markets will continue to face challenges in the second half of the year, which should dampen investor sentiment.
“While the crypto space experienced significant challenges during the first half of 2022, crypto-focused companies attracted $14.2 billion during H1’22…
Crypto and blockchain investments will increasingly focus on infrastructure. While investments in cryptocurrencies are expected to decline further [in H2’22]there will likely be a continued focus on the use of blockchain in financial market modernisation.”
The audit firm says retail firms offering tokens and non-fungible tokens (NFTs) will be most affected.
KMPG goes on to note that despite the troubling events that occurred in the crypto space in the first half of 2022, the year remains strong compared to previous years, other than 2021, in terms of how much money has flowed into the industry.
“Despite the crypto space collapsing significantly since mid-Q1’22 due to the unexpected Russia-Ukraine conflict, rising inflation, and the challenges experienced by the Terra crypto ecosystem, investments remained well above all the years leading up to 2021.
This highlights the growing maturity of the space and the breadth of technologies and solutions that attract investment.”
KPMG then highlights a key trend in the crypto markets that emerged in 2018: institutional and corporate players overtaking retail traders as the top investors in digital assets.
“Prior to 2018, most crypto investments came from retail consumers. Since then, the investor profile has changed, with institutional and corporate investors now accounting for a much larger share of investments. This has driven significant changes in the perception of risk associated with crypto assets.
While crypto-assets were historically considered quite uncorrelated with traditional assets from an investment risk perspective, they now behave very similarly.”
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