Crypto Investment Doubled in First Half of 2021
Market Musings

Crypto Investment Doubled in First Half of 2021

By Leo Jakobson
2mo ago
2m

Big Four accounting firm KPMG said investments in blockchain and cryptocurrency projects in the first half of 2021 was more than twice as much as all of 2020.

Crypto Investment Doubled in First Half of 2021

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Investment in blockchain and cryptocurrency projects is growing fast, according to a new FinTech report from Big Four accounting firm KPMG.

In “The Pulse of Fintech H1’21” KPMG said investment in the sector in the first half of the year was “more than twice the level seen in 2020 and soaring past the previous annual

record high set in 2018.”

It was $8.7 billion by the end of June 2021, compared to $4.3 billion in 2020. And the investments have also shot past the high water mark of 2018, when firms plunged $7.2 billion into the sector.

This “rising interest in cryptocurrencies and blockchain [comes] not only from startups and investors, but also from governments and regulators,” the report said. 

The type of investors backing cryptocurrency and blockchain firms is also maturing, the report said, noting that “a significant amount of institutional money flowed into the crypto space, highlighting the broadening of the investor base.”

KPMG said that reflects investors’ “much better understanding not only about crypto assets, but also the operational and procedural side of crypto — from custody and storage to storekeeping and the competitiveness and maturity of service providers.”

This is reflected in the number of companies raing nine-figure sums, KPMG said, pointing to the $350 million raised by Blockfi, $300 million by Paxos and by Blockcghain.com, and $250 million by Bitso.

Other trends it touched on were a growing interest in NFTs, increasing regulatory scrutiny, and China’s aggressive push in central bank digital currencies.

Top Banks Jump In

Indeed, Blockdata said in a report this month that more than half of the world’s top 100 banks have invested in cryptocurrency and blockchain.

While unable to determine the exact amount banks have invested, Blockdata looked at the number of investments the 55 banks have made, and the total size of the funding rounds they have backed. 

The most active of dozen top banks was Barclay’s with 22 investments, followed by Citibank (14), BNP Paribas (9), and JPMorgan Chase (8) and Goldman Sachs (8).

The investors in the largest rounds were Standard Chartered with investments in a combined $380 million, BNY Mellon with $321 million, Citibank with $279 million UBS with $266 million, and BNP Paribas with $236 million.

Crypto custody was the top field of investment, Blockdata said, adding that 23 of the top 100 banks by assets under management were building custody solutions.

“The fact that many banks are now trying to provide these services after years of warning their customers against using cryptocurrency and specifically Bitcoin, is probably one of the most ironic evolutions of the blockchain and cryptocurrency space,” Blockdata said.