A new survey has shown that blockchain investments in China in investment and financing deals dropped in 2019 by more than 40%. Over the course of last year, there were around 245 investment and financing deals in China, which is almost 60% less than those in 2018.
Blockchain Investments in China dropped 40% Last Year
According to data collected by state-run media Xinhua and financial data platform Rhino Data, the total Chinese blockchain investments last year accounted for around $3.6 billion. These figures were released by Xinhua Finance on January 15, 2020, and it indicates a 40.8% drop in investment in 2019 compared to the previous year.
Despite the drop in investment, the number of deals and the value of those deals have increased significantly since 2017, the study shows. As a result, 2018 will remain as the peak year in terms of Chinese investment spending in the blockchain. According to the data, there were more than 600 deals happening across the year, with 2017 accounting for only 168 deals.
Xinhua also established that early-stage investments such as Series A funding rounds in 2019 accounted for 43.3%. On the other hand, the percentage of mergers and acquisitions and strategic investments increased significantly in the second half of 2019. Equally, around 292 institutions had totally taken part in the investments with Shenzhen, Hangzhou, and Beijing attracting some of the largest blockchain projects.
Chinese Government Supporting Blockchain Development
China has been aggressively enhancing its blockchain expertise in recent times. This comes after China’s President in October last year called for the nation to speed up the adoption of blockchain. Therefore, the fact that blockchain investment spending declined last year is somewhat unexpected.
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In late last year, state-owned media quoted research by US market intelligence company IDC stating that China’s blockchain spending will hit $2 billion by 2023. The Chinese government has been supporting blockchain initiatives and has made progress in the creation of a government-backed cryptocurrency (digital yuan). The People’s Bank of China conducted significant research before it started piloting the currency in December last year.
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Joseph Spezzano received a Masters Degree in computer science from The University of Massachusetts. Joseph has been working as a full-time blockchain programmer for the past 5 years. In his spare time, Joseph enjoys writing for CryptocurrencyInvestments.com and traveling.