KPMG Believes Crypto Is Maturing Despite Global Crackdown And Bearish Market

KPMG International Limited, one of the world's largest audit and accounting firms, has revealed that venture capital firms poured $14.2 billion into crypto tech across 725 deals in the first half of 2022, adding that institutional investments will remain slow for the rest of the year.

The firm in a report released on Sept. 6 that companies with the biggest investments in the crypto space for H1 2022 included Germany-based crypto trading platform Trade Republic, which invested around $1.1 billion; digital asset custody platform Fireblocks, which invested around $550 million; crypto exchange FTX, which invested around $500 million and Ethereum software company ConsenSys, which invested around $450 million.

Although the crypto market has been experiencing a major downturn since the beginning of 2022 after breaching the $3 trillion market capitalization in November 2021, the continuous flow of investment into the space "highlights the growing maturity of the space and the breadth of technologies and solutions attracting investment," according to KPMG.

It then pointed out that the crypto market has seen its fair share of bearish events, including the Russia-Ukraine conflict, the Terra stablecoin collapse and the bankruptcy of crypto lending firm Celsius and crypto VC Three Arrows Capital. But investments are still pouring into the space as tech firm Samsung entered the crypto space recently, followed by Google's move to invest in crypto projects as well.

KPMG stated that investor sentiment remains strong as the average investment for mid-2022 is higher when compared to the average investment in mid-2021. However, there has been a decline from $32.1 billion in 2021 to $14.2 billion in 2022 in investments.

Alexandre Stachtchenko, director of blockchain and crypto assets at KPMG France, noted in the report that "well-managed crypto companies with healthy risk management policies, long-term vision and strong cost and risk management approach" will be able to survive the current crypto bear market.

"Of course, some cryptos will die out — particularly those that don't have clear and strong value propositions. That could actually be quite healthy from an ecosystem point of view because it'll clear away some of the mess that was created in the euphoria of a bull market. The best companies will be the ones that survive," Stachtchenko explained.