Crypto Investments to Slow in the Second Half of 2022, Says KPMG
Meta description: The cryptocurrency market is expected to slow down as 2022 enters its second half. KPMG, a global audit, and consulting firm, has released its predictions.
Since the worldwide cryptocurrencies and blockchain investment have decreased to $14.2 billion in the first half of this year, KPMG predicts that the slowdown in the crypto market will continue in the second half as well.
Not to forget that last year, cryptocurrencies showed a record increase of approximately $32.1 billion. Since then, the experts have been expecting a rise in 2022; however, 2022 did not turn out the way it was assumed.
The KPMG said in a news interview that, in the first half of 2022, many factors contributed to the upward trajectory of the global fintech investment of cryptocurrency globally. This includes turbulent public markets, a rise in the inflation rate, geopolitical uncertainty, ongoing supply chain disruptions, and high levels of interest rates. Moreover, it is also said that with such uncertain circumstances, it is expected that 2022 will be subdued.
Top Crypto-Friendly Deals in the First Half of 2022
According to the stats, there are some crypto-friendly deals, including a German fintech Trade firm that secured a $268 million extension to its $900 million C round in 2021, crypto Fireblocks Infrastructure company raised $400 million, Ethereum infrastructure gathered $450 million, crypto exchange FTX secured $400 million, and crypto infrastructure Fireblock raised $550 million.
However, it is also stated that the investments remained strong compared to the pre-2021 results. Though 2022 can behold more challenges for the companies in this sector, said the KPMG.
Moreover, the firm also states that these stats are particularly for retail firms that offer tokens, non-fungible tokens (NFTs), and coins.
Reasons for Collapsing of Crypto Sector
The collapse of the cryptocurrency market in the midway of 2022, the significant cause behind it is assumed to be the invasion of Russia in Ukraine, the destruction of the Terra ecosystem, and the rise in inflation globally.
Subsequently, the report by KPMG also acknowledged that crypto investments remained well above all years before 2021. This indicates that the breadth of technologies and growing maturity of the space and solutions are attracting investors.
What are the Expectations from the Crypto Market in the Second Half of 2022?
As per the report by KPMG, investors are expected to be more inclined toward blockchain infrastructure projects. Moreover, in particular, the projects that are more focused on utilizing the blockchain in the financial modernization of the market and projects that actively take part in the transaction traceability-related products and compliance.
Subsequently, the firm also predicts that the investors, especially corporates, will look for the operational advantages of the crypto. The interest in stablecoins may also increase at the same time.
Furthermore, it can also be expected to survive in the bear market. The crypto companies will be tested as some look for recapitalization at lower valuations. According to KPMG, well-managed and well-settled cryptocurrency companies with a long-term vision, strong cost, healthy risk management, and productive approaches can conquer the market. It can be expected to have the upper hand.