In Australia, it seems that the blockchain and crypto sector is leading even though it is in a “decline” ranking. In fact, in the Australian fintech landscape, crypto companies represent 14% of the 60 total that closed during 2024.
Australia and the decline of the fintech landscape: the blockchain and crypto sector is the most affected
From the report Australia Fintech Landscape 2024 by KPMG, it emerged that for this year, amid a general decline, the blockchain and crypto sector seems to be the most affected.
In practice, in the finance and technology sector, over 7% of Australian fintech companies have closed their doors in this 2024.
Specifically, about 4.5% of the 60 companies have ceased operations, while 3% have closed due to mergers and acquisitions (M&A). Most of the merger and acquisition operations were driven by strategic needs, with the buyers looking to enhance specific capabilities.
Of these 60 Australian fintechs closed in 2024, however, it seems that a good 14% are from the blockchain and crypto sector, making the category first in the ranking for decline.
Here is how the text reads:
“The blockchain and cryptocurrency space was the most affected in the Australian fintech landscape, with a 14% year-on-year decline and 74 active enterprises in 2024″.
Australia and the closure of crypto and blockchain companies in 2024: the reasons and forecasts
In reality, the Australian fintech landscape has been in decline for two years already, decreasing from 800 companies in 2022 to 767 active companies across all sectors of activity.
Also in the specific case of the blockchain and crypto category, the report identifies the possible causes of its significant decline this year.
Here is what it says:
“At a global level, this year the spotlight has shifted from blockchain technology to AI, with investors pouring capital into the increasingly important AI space to transform their business into a forward-thinking company capable of managing AI”
In practice, it seems that there is a choice by investors to prefer Artificial Intelligence (AI) over Blockchain technology.
In any case, the report goes on to predict that the major events of this 2024, such as the approval of spot Bitcoin ETFs, could act as a positive catalyst for the blockchain space.
Not only that, another factor that could favor the blockchain and crypto sector is the rate cuts that will soon be initiated in Australia as well, which will free up capital for new alternative investments.
The offering of crypto derivatives by Kraken and the launch of spot Ethereum ETF
Last month, Kraken launched a licensed broker offering in Australia, dedicated to crypto-based derivatives.
In practice, Australian wholesale clients can purchase crypto derivatives that allow them to gain exposure to the price movements of cryptocurrencies, without holding the assets.
Last October, however, still in Australia, the first spot ETF on Ethereum was launched: the Monochrome Ethereum ETF (IETH). This event came after the spot ETF on Bitcoin by Monochrome, the IBTC, was launched in June 2024.
