Market Analysis Report (07 Sep 2022)

Analysts at global audit and consulting firm KPMG have predicted that even as investments in cryptocurrencies and blockchain technologies keep on declining, they do not yet see a bottom and expect the slowdown to continue.

At the end of June, crypto and blockchain investments totaled $14.2 billion, while in 2021 investors allocated a high of $32.1 billion into the cryptocurrency industry. Per KPMG, prior to 2018 most crypto investment “came from retail consumers,” but since then, “the investor profile has changed, with institutional and corporate investors now accounting for a much larger share of investment.”

KPMG’s analysts noted that the current macroeconomic environment has meant crypto is being traded more like a risk asset, with a tight correlation to broader markets. For the rest of the year, KPMG predicted a “slowdown in crypto interest and investment, particularly retail firms offering coins, tokens and NFTs.”

The analysts added that the move toward decentralized finance is expected to survive the slowdown:

"While investment in cryptocurrencies is expected to slowdown further, there will likely be a continued focus on the use of blockchain in financial market modernization."

Per the firm, well-managed crypto companies with “healthy risk management policies, long-term vision, and strong cost and risk management approaches” will survive.