International audit, tax, and advisory services provider KPMG predicts a slowdown in crypto investments for the next months of 2022.
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According to a report on the performance of fintech companies in the first half of 2022 by KPMG, the blockchain/crypto sector still sees big deals.
KPMG mentioned that although the crypto industry faced major difficulties during H1, 2022, crypto firms secured over $14 bln including a $1.1 bln raise by the German online broker, the Trade Republic in June. However, for the rest of the year, the organization predicts market declines. There is expected to be falling valuations, growing Mergers and Acquisitions, and distressed businesses.
The focus will continue to be on embedded solutions, which includes payments, finance, and insurance. In comparison with recent years, big technology companies will look for add-ins at lower prices.
KPMG says the decrease in crypto interest and investment will mainly be seen in retail firms offering coins, tokens, and NFTs. There will be an increased focus on underdeveloped fintech markets, including jurisdictions in Africa. KPMG also predicts the growing role of blockchain in financial market modernization.
Data reveals that despite the decrease, investment in crypto remains ahead of all other years except 2021. KPMG mentions several reasons for the slowdown, including Russia-Ukraine conflict, growing inflation, and the collapse of Terra. According to the organization, this indicates the advancement of the industry.