The blockchain market has lost $ 2.8 billion in the past two years, with the coronavirus disease (COVID-19) pandemic affecting the growth of the new industry
Blockchain adoption and revenue dropped dramatically between the 2018 crypto winter and the 2020 COVID-19 pandemic. Global blockchain market sales declined 35% between the reporting period.
The estimated loss to the market is currently around $ 2.8 billion, according to global technology market consultancy ABI Research. During the 2018 bear season, the cryptocurrency market lost most of its market capitalization, and over 2,000 cryptocurrencies folded their trades. The decline in the cryptocurrency market had a negative impact on the introduction of blockchain technology, as several startups were unable to use the technology due to falling market capitalization. This year’s COVID-19 pandemic has further impacted blockchain revenues as the global economy continues to suffer significantly.
Despite the decline in adoption and sales, ABI Research believes this will be short-lived. Blockchain technology is becoming increasingly important as leading industries around the world try to take advantage of its benefits. Blockchain is increasingly winning in areas such as supply chain, education, government, transportation, health, energy, Internet of Things (IoT), and resource monitoring.
Michela Menting, currently director of digital security research at ABI Research, believes the crypto winter and COVID-19 pandemic have helped cleanse the market of speculative offers. Therefore, the more important startups would have enough space to offer excellent services and promote the acceptance of technologies.
Menting stated that several speculative companies have been taken off the market and that this would work wonders for the blockchain ecosystem in general. This would strengthen the existing startups and ensure that only the more viable and valuable business models are created over the next few years. As such, ABI Research expects the market to hit 2018 highs by 2023.
Despite falling adoption and declining revenues, blockchain technology has improved various aspects of the global economy. According to Menting, the pandemic has shown how inadequate and flawed some of our existing practices are, particularly with regard to transparency and product quality assurance. This is where blockchain technology comes in and is designed to address these issues. As more countries and companies around the world show interest in blockchain technology, demand will increase sales for blockchain applications, with an emphasis on areas such as manufacturing, transportation, storage, retail and consumers.
Blockchain is expected to gain further acceptance in the coming years. Current global blockchain spending is $ 4.1 billion, with the bulk of it coming from the banking and finance sectors. However, logistics, healthcare, and agriculture are expected to be some of the leading sectors for blockchain adoption in the years to come.