European crypto app downloads almost halved from 2021
Crypto is one of the hardest hit technology sectors after this year’s economic downturn.
But the current market volatility – which has included widespread layoffs at European companies such as Blockchain.com and Bitpanda, and the collapse of several cryptocurrencies such as Terra USD – has not deterred VCs from investing. They still believe it will eventually lead to a financial revolution – or at least some tasty returns.
But what about those who actually buy cryptocurrencies?
Popularity is halved
App Radar has analyzed how many downloads the top European crypto apps attracted in the first half of 2022, compared to the first half of 2021 (using data from the Google Play Store).
The results, shown below, reveal that these ten apps have been downloaded 4.1 million times in the first half of 2022 – a 45% decrease from the first half of 2021, when they achieved 7.5 million downloads.
[OVERALL TABLE]
Only three crypto apps – crypto exchanges Bitstamp, Change and Coinmetro – have seen a marginal increase in downloads compared to last year.
Wider matches
It’s perhaps no coincidence that the apps that saw the biggest drops in popularity have also struggled with bigger corporate problems.
Bitcoin mobile wallet BRD experienced the biggest drop in user downloads since last year, falling by 97% from 1.6 million in H1 2021 to 48,000 in H2 2022. According to market analysts, the BRD digital asset token – “Bread” – is among the top 14 % the most volatile cryptocurrencies in the market.
Beleaguered Austrian crypto trading platform Bitpanda saw a 65% drop in app downloads from 563,000 in H1 2021 to 197,000 in H1 2022. In June laid off a third of its employees, admitting that it had hired too fast and needed to cut expenses amid the crypto market.
The UK’s Blockchain.com, meanwhile, saw its app downloads fall 51% year-on-year. The company recently made layoffs equivalent to 25% of its global staff and has suffered the fallout from the collapse of crypto hedge fund Three Arrows Capital in July.
The professional investor divide
VCs tell Sifted that the cooler economic climate means they are scrutinizing their portfolio companies’ performance even more than usual.
Metrics like user downloads are one of the key stats they’ll keep an eye on as a barometer of growth. Of course, an app download does not necessarily mean engagement and thus transactions and income. However, if the number of potential new user transactions starts to decline, this will create problems for revenue growth – which in turn will affect a business’s valuation.
However, all this does not seem to have hurt overall VC investment in the sector yet.
Last year, VCs poured $2.9 billion into European crypto startups, according to Dealroom data, which was a big increase from the $431 million invested in 2020. So far in 2022, the figure is $1.9 billion — which suggests that by the end of the year the investment may be in line with last year’s figuresboosted amid a major market downturn by some fairly large late-stage fundraisings from mainstream VCs.
Retail investors will naturally be spooked by the collapse of high-profile cryptocurrencies such as Terra USD, or insolvencies of lenders they relied on for crypto-like Germany’s Nuri and US-based Celsius. While VCs may claim they’re in it “for the long game” and downturns are part of a cycle, it can be harder to keep the confidence of regular investors putting their hard-earned cash on the line.
Amy O’Brien is a reporter for Sifted. She tweets from @Amy_EOBrien and writes our fintech newsletter — You can register here.
