In recent years, many new blockchain-based startups have emerged around the world. Some established companies like Coinbase have also run fairly successful public offerings. Keep the following in mind – The number of newcomers to the industry this year has almost combined the numbers of the last two years.
However, such growth across the blockchain industry has been geographically disproportionate. In fact, most of the new companies emerged from North America, namely the United States and Canada, according to a recent report.
A report published by Coinshares found that North America ranks the highest in terms of the number of pure blockchain companies. The region accounts for 68% of all 57 publicly traded crypto companies, with the US having 25 such companies, followed by Canada with 14.
In terms of value, North America almost completely dominates the total market share of these companies with 94%. While Canada had a 13% market share, the US enjoyed an overwhelming 81% of the total. This is not surprising given that the continent’s most popular exchange, Coinbase, recently had a successful IPO with leaders like JP Morgan, with Morgan Stanley now owning its shares.
The report also cited the “liquid nature” of the American market. Investors in the American market are more risk-taking and more open to new technology, which leads to higher valuations. Interestingly, the highest earners so far this year have not been stock exchanges but mining companies.
Their aggregate market capitalization increased 121% due to the larger surge in the crypto market, along with the decrease in hash rate in Bitcoin mining due to the Chinese approach to mining. This resulted in higher profits for the remaining miners. While crypto financial services saw a 105% increase, the exchanges saw an increase of “only” 34%. This despite the fact that their market capitalization is the highest among the others.
Since the financial services sector also includes companies that manage and invest funds in cryptocurrencies, their 105% growth matched the 111% price increase of Bitcoin. This sector includes companies like Square and JP Morgan Chase, which are leaders in the financial sector.
Unsurprisingly, a correlation can also be observed between cryptocurrency price spikes and new blockchain-focused companies, with the 2018 and 2021 bull runs coinciding with the strong influx of new companies. Ergo, their performance will then also be determined by market movements, with the companies listed in 2021 performing far more vintage companies.
Nonetheless, investors are equally excited about these new deals. In fact, a recent KPMG report found that institutional investments in blockchain far outperformed inflows in cryptocurrencies. Investment activities here include venture capital, mergers and acquisitions looking for promising fintech startups.
In addition, top banks such as Barclays, Citigroup, Goldman Sachs, JP Morgan Chase and BNP Paribas are also investing heavily in the ecosystem. Both through direct and indirect investments.
With companies like Binance eyeing an IPO, direct investment in the blockchain industry will only grow from $ 98 billion.