Blockchain and cryptocurrency revenues could take a $2.8 billion hit by the end of 2020 as it struggles to push past the 2018 ‘crypto winter' and the fallout from the COVID-19 pandemic, according to new statistics from ABI Research.
Crypto winter is the nickname for a period that started in 2018 through 2019 in which crypto markets tumbled and wiped 80% of the aggregate market cap, leading to the collapse of many cryptocurrencies.
In 2020, the COVID-19 pandemic has also dampened appetite for new blockchain innovations, as well as crypto investments. ABI Research calculates a drop in worldwide blockchain revenues between 2018 and 2020 of 35%, effectively ending the ‘blockchain rush'.
However, ABI Research says that the revenue drop will not last long. Existing companies operating in the blockchain and cryptocurrency space now have less competition in the market because many speculative offerings were removed from the marketplace during the crypto winter and COVID-19 pandemic.
ABI Research digital security research director Michela Menting says that more sound business models may also emerge.
“ABI Research expects the market to get back to 2018 revenue levels by 2023,” says Menting.
Verticals expected to benefit from market recovery includes those already dealing in blockchain or cryptocurrency, as well as other emerging areas. These emerging areas include blockchain's applications to supply chain and logistics management, and healthcare.
Blockchain in healthcare could be useful for the sharing of timely, relevant, and authenticated information about the pandemic, especially as misinformation runs rife, ABI Research believes.
“Blockchain projects launched by the United Nations' World Health Organisation, alongside many national Centers for Disease Control, show the usefulness of blockchain in these circumstances. Healthcare applications are expected to increase faster than anticipated in light of the pandemic.
Menting adds, “The pandemic also revealed the inadequacies and flaws of existing procedures, especially in terms of transparency and quality assurance. Blockchain is now a technology that is recognised as capable of addressing these issues. As such, interest and demand will boost revenue for blockchain applications focusing on manufacturing, transport, and storage, as well as on retail and consumer.
These findings are from ABI Research's Blockchain and Distributed Ledger Technology market data report. This report is part of the company's Digital Security research service, which includes research, data, and ABI Insights.
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