Australia’s Blockchain Industry Sees 14% Decline Amid Global Shift to Artificial Intelligence

The Australian fintech landscape has experienced a significant decline, with the number of active blockchain firms shrinking by over 10% compared to 2023. According to KPMG’s “Australian Fintech Landscape 2024” report, the blockchain sector was among the hardest hit, falling 14% year-on-year.

The number of firms in the sector now stands at 74, down from 85 last year. Despite this decline, the country’s blockchain and crypto sector remains home to big players, including Independent Reserve, SwyftX, and CoinSpot.

Global Trends: A Shift from Blockchain to Artificial Intelligence

The downturn in Australia’s blockchain industry is not an isolated phenomenon. Globally, the focus has shifted from blockchain technology to artificial intelligence, with investors increasingly directing capital into artificial intelligence to modernize and future-proof their businesses.

Potential Catalysts for Recovery

However, there is still hope for a recovery in the blockchain sector. The SEC’s approval of Bitcoin exchange-traded funds in the U.S. could serve as a positive catalyst for the space. Additionally, recent rate cuts in multiple regions could “free up capital that has been sitting on the sideline and which could potentially be deployed back in the sector, as the risk-free rate falls making alternative investments more attractive.”

Some key points to consider:

  • The SEC’s approval of Bitcoin ETFs could attract new investors to the blockchain space.
  • Lower interest rates could make alternative investments, such as blockchain and crypto, more attractive.
  • Investor sentiment remains cautious, with venture capitalists still wary of investing in fintech and the broader financial services sector.

For more news on the blockchain and crypto industries, visit Global Crypto News.

Additional Insights

Neobanks took the hardest hit, with a 17% drop. KPMG notes that investor sentiment remains cautious, with venture capitalists still wary of investing not only in fintech but across the broader financial services sector.

Recent rate cuts in multiple regions could free up capital that has been sitting on the sideline and which could potentially be deployed back in the sector, as the risk-free rate falls making alternative investments more attractive.

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