A KPMG report shows that 7% or more of Australia’s technology companies have closed down this year, of which about 60 are in the blockchain and cryptocurrency field. Pixabay
According to the KPMG Fintech Landscape 2023-2024 report, the number of independently active companies in Australia’s fintech sector has fallen for the second consecutive year by 7.
The number of new blockchain and cryptocurrency startups fell by 14% in 2024, with only 126 successful IPOs. This decline is linked to growing regulatory challenges and economic uncertainty in the digital asset industry.
KPMG’s report shows that 7% or more of Australia’s technology companies have closed down this year, of which about 60 are in the blockchain and cryptocurrency field. As of December 2024, the number of fintech companies has dropped from 800 in 2022 to 767, indicating that the industry has had a difficult year.
About 33% of companies exited through mergers and acquisitions, 4.5% closed down completely, and 3% merged with other companies.
Funding shifts to AI innovation
Artificial intelligence innovation also contributed to the decline as funding shifted from blockchain and cryptocurrency to AI innovation.
Despite the challenges, KPMG remains optimistic, pointing to events such as the U.S approval of a Bitcoin ETF as potential factors for recovery. They expect new crypto businesses to emerge as demand for alternative investments grows.
Australia’s cryptocurrency industry faces intense scrutiny
However, increased regulation has made it harder for the cryptocurrency industry in Australia to thrive. Recently, the Australian Securities and Investments Commission proposed stricter regulations for cryptocurrency companies. The Australian Transaction Reports and Analysis Centre will also pay more attention to cryptocurrencies in 2025, especially targeting possible anti-money laundering violations by cryptocurrency ATM providers.
Despite these regulatory hurdles, cryptocurrency holdings in Australia are higher than the global average, with 17% of Australians owning cryptocurrencies. The country also has a younger pool of cryptocurrency investors, with two-thirds of investors under the age of 24.
While the future of the blockchain and crypto industry in Australia remains uncertain, there is hope for a recovery by 2025 as digital assets continue to gain momentum.