Blockchain lost $2.8 billion

Between crypto winter and COVID, blockchain market has lost $2.8 billion since 2018: report

ABI Research predicts the market will make up the revenue by 2023, due in part to the holes revealed in existing supply chain and logistics management by the pandemic

Between the crypto winter of 2018 and the COVID-19 pandemic of 2020, the global blockchain market has taken a $2.8 billion hit, according to a new report.

In a Nov. 4 release, tech market advisory firm ABI Research said it believes that the knock-on effect of the cryptocurrency market’s 2018 downturn—which wiped out 80% of the total cryptocurrency market cap—had far-reaching consequences for the blockchain space:

“This dampened blockchain adoption significantly in other markets, with many startups folding and different verticals showing a distinct lack of uptake.”

Still, by mid-2019, Deloitte’s 2019 Global Blockchain Survey found that blockchain was “maturing in the eyes of many executives and decision-makers who are increasingly seeing the technology’s real promise.”

Specifically, more than half of that survey’s global respondents said blockchain will become so critical to their organizations that it will be in their top five strategic priorities. Beyond that, 86% believed the technology is “broadly scalable and will eventually achieve mainstream adoption.”

While the business interruption caused by the pandemic slowed adoption again, ABI argues that it has also “had a significant impact on investment opportunities and appetite for new blockchain applications.” 

As a result, the authors of the report suggest that the dip “will be short-lived.” The firm’s security research director, Michela Menting, explained:

“Many speculative offerings were purged from the marketplace. However, this will be relatively beneficial for the blockchain ecosystem overall, strengthening existing startups and ensuring sounder and more valuable business models emerge over the next few years. ABI Research expects the market to get back to 2018 revenue levels by 2023.”

Pandemic highlights usefulness

ABI also argues that the COVID-19 pandemic also had a secondary—positive—impact on the blockchain supply chain and logistics management space, speeding its growth “due in part to the international scramble for medical and healthcare equipment.” Menting said:

“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 recognized 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.”

Beyond that, interest in blockchain’s ability to facilitate the sharing of timely, relevant, and authenticated information on the pandemic—such as the spread of infection, containment and hygiene practices, and vaccine trials and research—”is soaring… especially in light of misinformation increasingly being spread online and through social media.”

Pointing to the use of blockchain by the UN World Health Organization (WHO) and U.S. Centers for Disease Control and Prevention (CDC), Menting said these projects “show the usefulness of blockchain in these circumstances. Healthcare applications are expected to increase faster than anticipated in light of the pandemic.”

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Adrian is a newswriter based out of Pisa, Italy. He's passionate about cryptocurrency, digital rights, IT, tech and futurology and likes to think about the future in a positive way.