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Blockchain in Finance: Sector primed to bounce back! 

 

Blockchain has established itself as a challenger to the conventional Finance landscape. Many teams are trying to define ground rules to govern the course of evolution of finance in blockchain. Despite technological challenges and regulatory hurdles, teams are innovating faster to stay abreast with the new rules of engagement in the ecosystem. Initial results are clear in terms of intermediaries in cash transfers, capital and risk.

 

InWara studied trends among the companies with blockchain technology with or without an ICO. This report provides insights based on the analysis of ICOs with participation in tokens from Institutional investors, capital raised via private rounds and data based on information published by companies raising funds through an ICO.

 

This study covers

  • Finance Sub-sectors — ICO Landscape
  • Finance ICOs — Market Trends
  • Private Funding Activity
  • Mergers and Acquisitions
  • Miscellaneous Stats
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Finance Sector ICO Landscape

 

Finance as a sector dominates with over 957 ICOs till date, however, not all of these were successful in raising capital to reach their respective hard caps. Within the Finance sector, the sub-sector Financial Services has seen the largest number of successful ICOs at 137.

 
Source: InWara’s ICO database

 

Financial Services contributed to over 40% of total ICOs in the Finance Sector which in turn accounted for over 40% of all ICOs.

 

CAPITAL RAISING TAKES A BREATHER WITH THE THRESHOLD AVERAGE HARDCAPS SEEING A MARGINAL CONTRACTION

Source: InWara’s ICO database

 

UNDERSTANDING TOKENOMICS IN FINANCE SECTOR

 

Finance as a whole raised $2.4 billion in 2017 and $1.9 billion YTD 2018. The mean funds raised remained fairly stable at $40 million for 2017 & YTD 2018.

 

Noteworthy, is the difference between Hardcap and Softcap which has decreased during 2018 vs 2017. This is due to a simultaneous decrease in Hardcap and an increase in Softcap, indicating a maturing market with a better understanding of capital requirements and deployment. Key players with successful ICOs are:

 

DRAGON COIN (DRG)

Dragon is a blockchain-based player that provides payment solutions in the entertainment industry in a secure, transparent and cost-effective way.

 

PUMAPAY (PMA)

PumaPay is a blockchain based payment protocol which includes the unique architecture of Pull Payment.

 

LIQUID (QASH)

Quoine’s Liquid platform is a globally-sourced trading platform with an associated suite of brokerage services. Combined, these provide the highest liquidity in the world — allowing anybody to access the opportunities and wealth the new crypto economy offers.

 

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RETURNS ON INVESTMENT: INSURANCE ICOs IN DANGEROUS WATERS

 
Source: InWara’s ICO database

Despite the volatility in the broader market, Investments, Cryptocurrency & Financial Services based ICOs have managed to remain positive and provide solid returns for Q3, 2018. Unfortunately, Insurance ICOs have seen a double dip downward trend and are the most downtrodden in the space.

 

Finance ICOs- Market Trend Analysis

 

This section covers macro-news and events affecting the market:

  • Fidelity Investments case
  • Intercontinental Exchange’s Bakkt’s crypto institutionalization
  • Google’s stand on cryptocurrency

 

Private Funding Activity

 

Private investors have staunchly backed this sector with the number of investment rounds up by 65% during 2018. The total capital raised by the Finance space in private investment rounds has crossed $1 billion in Q3 2018. Overall, Private funding has seen huge growth of over 150% during YTD 2018 as compared to 2017.

 
Source: InWara’s Private Funding database

Among private investors, Venture Capital involvement in the pre-sale and private sale has seen a steady increase.

 

Top 10 Most Active Venture Capital investors in the Finance Sector

Source: InWara’s Private Funding database

Focused Blockchain funds have been opening up their wallets in 2018 with large number of investments made by Digital Currency Group & Blockchain Capital.

 

Mergers & Acquisitions: Finance sector acquisitions up by 61 % in 2018

 
Source: InWara’s M&A database

Analysis of massive deals like Coinbase acquiring Earn.com is covered in this section.

Many more details in the sector report!

 

Miscellaneous Stats

 

This section miscellaneous details on active ICOs, failed ICOs and concluded ICOs and a detailed analysis of their success and failure rates. This report also does an analysis of the founder — age, backgrounds, experience, etc.

 
Source: InWara’s ICO database

80+% of ICOs are led by a management under the age group of 35–40 years.

 

To sum up

 

The future seems optimistic despite the slow down in 2018. A step back from the charts and an education on the underlying fundamentals indicates that digital assets have been beaten without cause and a bounce back is imminent.

 

Download the full 50-page paid report

 

 
Disclaimer: This is not a financial advice. For more details visit t&c