PwC, a Swiss investment company from the CV VC blockchain market and the Cointelegraph portal published a report discussing the current state of the blockchain and digital currency ecosystem.
PwC, CV VC and Cointelegraph are researching the market
Blockchain technology originally only served Bitcoin. However, it was known from the beginning that it allows for much more than just sending cryptocurrencies within a given network. The blockchain is constantly evolving today. So the three companies mentioned looked at the topic.
The report entitled “CV VC Global Report H1 / 2020” provides a detailed overview of companies using blockchain technology in eight different sectors, including arts, banking, cryptocurrency exchanges, custodian service providers, market makers, token-issuing platforms, and venture capital.
Nicolai Reinbold, co-author of the report and incubation and ecosystem manager at CV VC, said Cointelegraphthat the purpose of the new report is to outline what the global blockchain ecosystem looks like today. Notes that it is about current trends and the future of the market. He also points out that the report consists of data from sources of specific companies, cryptocurrency exchanges, media reports and social media channels.
Growing role of some entities
Cryptocurrency companies started expanding their offer some time ago. The aim is to provide customers with the functions that banks guarantee. This includes, for example, interest and loans using digital resources. Consequently, cryptocurrency banks and brokerage firms now play an important and growing role in the adoption of digital assets.
Mathias Imbach, co-founder of Sygum – a bank of digital assets – notes that the regulatory ecosystem of digital assets is crucial to the development of cryptocurrency assets.
“This market is projected to be worth $ 24 trillion by 2027 and has the potential to change the securitization business model in the coming years.”
– He said.
The report also discusses the important role of cryptocurrency exchanges, comparing them to traditional exchanges as they allow clients to buy and sell assets. However, keep in mind that there are many different types of digital currency exchanges, many of which focus on different functions.
For example, Roger Darin, a board member of Bitcoin Association Switzerland and co-founder of the fintech division of SICTIC – an organization of business angels in Switzerland – explained that the blockchain space now needs a secure place to buy and sell tokens.
“Ideally, this location should be in a jurisdiction that investors associate with stability, prosperity and financial credibility. It should be as easily accessible to retail investors as it is to banks and professional investors “
– he thinks.
Darin further pointed out that the decentralized financial sector is also growing in strength.
Depositaries are critical to cryptocurrency adoption
Cryptocurrency custodian services are also becoming more and more popular as regulatory changes important to this market are implemented in a growing number of regions around the globe. However, according to the report, the cryptocurrency storage market is often overlooked. This can be seen, for example, in the approach to it by retail clients. It certainly plays a bigger role in terms of institutions.
Adrien Treccani, founder and CEO of METACO – a provider of various cryptocurrency services – noted that the entry into this space of large global institutional players such as Libra and PayPal underscores the need for digital asset management by trusted entities.
It is true that investors may enjoy, the announcement of the US Bureau of Currency Controller now allows all banks in the United States to provide cryptocurrency trust services. This is a huge leap forward for digital currency storage service providers and an incentive for more digital asset companies to apply for these qualifications.
Market makers guarantee liquidity
A market maker or liquidity provider is a company that quotes a buy and sell price for a token, which is critical to ensuring a functioning market. The digital asset ecosystem can only be successful if exchanges, token issuers, and liquidity providers work together to ensure the liquidity of the markets.
Anton Golub, founder and CEO of FLOV Technologies – a financial technology company focused on providing liquidity to digital assets – discussed in the paper why liquidity is still a missing element in the ecosystem. According to him, while the tokenization of high-value assets has increased, there is still a lack of liquidity:
“There is one key obstacle to this future development. Fluidity is a key success factor for the digital asset ecosystem. At the moment, we see that most tokens are not easily tradable due to a lack of liquidity, and the enormous potential of decentralized financial systems is on the verge of collapsing. “
Future and digital transformation
Another important component of today’s blockchain ecosystem are platforms and protocols that are actively developed. For example, a significant phenomenon in the field of blockchain is the current development of networks based on the Proof-of-Stake (PoW) algorithm.
Charles Hoskinson, CEO and founder of Cardano – a PoS-based blockchain platform – emphasized the importance of how Ethereum is making the transition to the PoS consensus mechanism by developing its new version, Ethereum 2.0. While this may be the case, he explained that developers will continue to look for other PoW projects to take advantage of their features.
Tokenization via various platforms
As tokenized assets continue to gain popularity, token issuing platforms have become crucial to the entire market today. To put this into perspective, Daniel Rutishauser, CEO of Tokengate, the Swiss token issuing platform, adds that he is convinced that the token economy will ultimately enable new business models and open participation in the global economy:
“Small and medium-sized enterprises cannot participate in the existing capital market. Today, it is difficult for retail investors to find investment opportunities on a solid footing. Issuing digital securities is a way to combine these two elements and establish financial integration within a smaller ecosystem “
– He said.
Trends in venture capital
The final part of the venture capital report includes insights from Olaf Hannemann, CV VC co-founder and chief investment officer. Hannemann points out that the changes are visible especially in venture capital markets and were observed even before the COVID-19 pandemic. It was especially about issues that focused on blockchain investments.
The report mentioned that funds actually slowed down their growth during COVID-19, which forced venture capitalists to focus on the financial issues of their portfolio companies. This had a negative impact on the preparation of companies to raise capital.
It also highlights general trends that were visible before the pandemic. For example, a recent PwC report shows that while global quarterly transaction activity is on the rise, financing and transactions have declined by 13% in the second quarter of 2020, respectively. and 9 percent Every year.
Regarding blockchain technology, one of the most interesting points mentioned is that overall technology funds continue to rise “In terms of their exposure to blockchain technology”.
You can read the entire report at this link.