“Crypto not blockchain” was the dominant narrative in 2019. Not only did Bitcoin have a very good year (up over 90%), but investors continued to fund companies building crypto infrastructure. Incumbent financial institutions also looked to expand their service offerings in areas such as custody and trading.

So far in 2020, amid the Covid-19-driven market sell-off, it’s clear that Bitcoin still behaves as a risk-on asset, not a store of value (yet). But despite the broad weakness in crypto prices, companies continue to build and launch products that benefit the maturing blockchain ecosystem. 

REPORT HIGHLIGHTS:

1. Bitcoin was on top until the coronavirus hit. Bitcoin’s price nearly doubled in 2019 despite dampened media coverage. Goldman Sachs named it the best-performing asset in 2019. However, since the coronavirus sell-off, BTC is down ~30% YTD.
2. Deals are moving from West to East. In 2015, 51% of deals were for US-based companies while only 2% went to China-based companies. In 2019, the US’ share of deals fell to 31% and China’s rose to 22%.
3. Enterprise blockchain funding has lagged. Efforts to reduce back-office costs and improve business processes are still ongoing. However, funding to other applications has been nearly 7x higher than to enterprise blockchain over the past 5 years.
4. Central banks are serious about fiat digital currencies. The future of programmable money could come out of a central bank, not a startup. Central banks across the globe, such as in China and England, are exploring central bank digital currencies.