M&A and Investment Activity Subdued in 2024
According to a recently released KPMG report, the number of active firms in Australia’s blockchain and cryptocurrency sector dropped from 85 to 74. This translates to a year-over-year decrease of 14%, the highest of any fintech subsector reviewed. However, despite this, the subsector is still composed of high-profile players like Independent Reserve, Swyftx, and Coinspot.
As noted in the report, the decline in the number of active firms in the blockchain and crypto sector is a microcosm of what happened to the broader financial sector in 2024. During this period, mergers and acquisitions (M&A) and investment activity in the financial sector were subdued, with deal flow and capital spending predominantly being capability-driven. Further, M&A activity was mostly concentrated on a smaller number of larger deals.
Regarding the likely reason for the drop in the number of active firms in the blockchain and crypto sector, the report states:
Globally, this year the spotlight shifted from blockchain technology to AI, with investors deploying capital in the ever increasingly important AI space to convert their business into a forward-looking and AI-capable one. However, after a few significant and adverse events for the sector in previous years, this year the SEC approval of the Bitcoin ETF could act as the positive catalyst the blockchain space needs.
The KPMG report suggested that rate cuts by central banks may free up capital that could potentially be deployed in the blockchain and crypto sectors.
Meanwhile, the payments subsector of Australia’s fintech industry is rated the most mature, with over 150 active firms headquartered in the country. During 2024, this sector saw investments from both local and foreign investors. However, there is an expectation that new regulations will be introduced to provide a clear framework and level playing field for operators.
Regtech, Australia’s third-largest fintech subsector, saw a rise in investment, with risk and compliance factors driving demand for these providers. According to the report, the constantly evolving regulatory frameworks, together with complex reporting requirements, will likely fuel interest and investment in this space for the foreseeable future.
#binance #wendy #bitcoin $BTC
