Blockchain Investments Fell By 63% Because Of COVID-19
After the heavy funding cuts for blockchain that occurred in 2020, global companies are looking forward to the technology as a way to regain a competitive advantage in the business landscape after the coronavirus. The blockchain investments fell by 63% because of the pandemic, and the technology suffered a lot because of COVID-19.
All of this has been combined in a new report by the professional services firm KPMG. They published the report and predicted that blockchain will be one of the five emerging technology sectors that will see increased investments from enterprises over the next 12 months.
The report which shows how blockchain investments fell by 63% because of COVID-19 was compiled by KMPG International and HFS Research, drawing on a survey of 900 executives from different organizations on the Forbes Global 2000 list of the largest companies in the public that have more than $1 billion in annual revenue.
While investments in blockchain fell by 63% because of the pandemic, the report predicts that this sector is one of the most potential ones, right along with cloud, 5G, artificial intelligence (AI), and process automation technologies.
KMPG also noted that the Global 2000 companies quickly moved to slash some funding to emerging technologies. Their view as the blockchain news show, is that the coronavirus lockdown and recessions took effects and forced a lot of firms to prioritize their survival over all other considerations. In that manner, roughly 40% of the executives indicated that they had moved to entirely cease investment into the emerging technology initiatives.
Blockchain investments fell and as the report shows, the funding has been the hardest hit by the COVID-19 lockdown. Distributed ledger technologies (DLT) slid from the largest emerging technology sector (with an average investment of $18 million) to the second smallest with $6.5 million.
The executives noted that blockchain investments fell, and the report found that 59% of the executives believe that the pandemic created an impetus to accelerate digitization initiatives. As executives reported, blockchain investments are seen to offer improvements in “competitive positioning” and are set to improve efficiencies and governance processes, providing the “foundation for infrastructure modernization.”
As Steve Hill, who is the global head of innovation at KPMG said in the cryptonews:
“Visible trust gaps for emerging technologies such as AI, blockchain and [internet-of-things] IoT continue to remain significant barriers to adoption. I believe that organizations will have to get trust right for successful deployment of emerging technologies to recover from the crisis […] It is these organizations that are likely to navigate through the recovery in better shape.”