KPMG, the global audit and consulting firm has presented a report which speaks of declining crypto investments.
The highlights in those reports were that globally, the interest in crypto along with investments was depreciating.
The report precisely signalled that there shall be a slowdown in investments for the rest of this year.
The global investments in crypto companies have fallen back to $14.2 billion in the first half of 2022 from close to $32.1 billion in the previous year.
This fall will apparently continue for the most part of 2022, as the report disclosed.
According to the report, the investment in both liquid cryptocurrencies and blockchain technologies has continued to fall as per the KPMG analysts.
They also mentioned that the bottom is still nowhere to be seen. The slow-moving pace of investors when it comes to crypto has the industry on hold, as investments are far low than the all-time high.
Change In The Profile Of Crypto Investors
Crypto and blockchain investments were recorded at a total of $14.2 billion. The profile of the investors also seems to have undergone a change over the last few years.
According to the report,
Prior to 2018, most crypto investment came from retail consumers, Since then, the investor profile has changed, with institutional and corporate investors now accounting for a much larger share of investment.
The present macroeconomic landscape has been linked to the broader markets as well and this is why crypto assets have been trading more like risk assets in recent months.
It has been a tough time for crypto this year.
Bitcoin and Ethereum have fallen down on their charts by over 50% of their value. Bitcoin at the moment has been trading at a six-week low of $18,900.
Analysts are of the opinion that the crypto market will not be experiencing a rally anytime soon.
Patrick Feeney, former hedge fund trader and founder of Feeney Factor, said that,
With inflation, unfortunately bitcoin acts like a tech stock, [Bitcoin is] supposed to be digital gold, but it’s just not panning out that way lately.
Shift In Investor Interests
KPMG says that in the second half of the year, investors might switch and choose different projects as opposed to their present choice of investments.
Investors might choose blockchain infrastructure projects over non-fungible tokens (NFT).
The inclination will be toward projects that would be targeting the use of blockchain in updating financial technology.
KPMG has noticed a grown interest in compliance and transaction traceability-related products and increased corporate interest in stablecoins as they are considered to be a lower-risk investment in the industry.
According to the company, KPMG has predicted that well-managed companies that have healthy risk and cost-management strategies will get through this significantly extended rough patch.
Some crypto companies however will be undergoing tougher times comparatively because they shall be “tested very hard as some look to recapitalize at lower valuations.”
Featured image from Financial Times, chart from TradingView.com
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