2023 Report Highlights Crypto’s Dominance in Fintech Investments in France and Germany

In a challenging period for the global fintech market, the crypto and blockchain sector has emerged as a notable leader in investment attractiveness across several major European markets.

The “State of European FinTech” report, recently published by Amsterdam-based fintech venture fund Finch Capital, paints a sobering picture for the Europe, Middle East, and Africa (EMEA) region. It revealed a stark 50% decline in fintech investments during the first half of 2023, plummeting from $27.3 billion in H1 2022 to a considerably lower $11.2 billion in H1 2023.

However, amid this decline, the crypto sector stands as a shining beacon, securing a dominant position in investment inflows in several key markets. In the United Kingdom, the blockchain and crypto industry captured an impressive 28% share of all fintech deals during H1 2023. The Netherlands surpassed this figure, with crypto accounting for a remarkable 35% of all fintech deals. Meanwhile, in Germany and France, the crypto sector’s share of the investment pie reached substantial levels of 27% and 29%, respectively.

Crypto’s primary rival in these markets appears to be the lending sector, which claimed the top spot in terms of market share in Ireland and maintained a significant presence across the EMEA region in deal volume.

Despite the overall bearish trends in fintech, investor interest in the digital economy remains resilient. Another recent report highlights that 24% of asset management firms have already embraced a digital assets strategy, with an additional 13% planning to do so within the next two years.

Furthermore, some crypto companies continue to demonstrate remarkable growth. For instance, European digital asset manager CoinShares reported a total revenue of £20.3 million ($25.9 million) in the second quarter of 2023, marking a substantial 33% increase compared to the same quarter in the previous year. This underscores the enduring appeal and potential profitability of the crypto industry, even in challenging economic circumstances.

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