Market Context
Last updated
Last updated
Investments in blockchain-based projects still represent a small portion of the Total Assets Under Management (AUM) worldwide, but the growth in this sector has been substantially higher than the average. Therefore, it presents a profitable investment opportunity for the coming years. Outside the realm of investments, blockchain-based technology brings enhanced security, transparency, instant and reliable traceability, automation, increased efficiency, and speed. As a result, it has been well received by the market, institutions, and industries in general. Today, we see blockchain technology being applied in finance, research and sciences, database analysis and management, supply chain trade, internal and external business operations, healthcare, insurance, food, music and art, video games, communications, fashion and design, fundraising, social projects, among others. Indeed, its functioning has come to expand the boundaries of technology and optimize the world as we know it. The caliber of impact projected and detailed later on is worthy of being seized by forward-thinking market agents.
PwC anticipates that global assets under management (AUM) will nearly double in size by 2025, from $84.9 trillion in 2016 to $145.4 trillion by 2025. Investments through asset managers continue to grow steadily, providing access, expertise, and track record to investors worldwide. According to Statista, the total assets under management for 2020 reached a record of $103 trillion, demonstrating an estimated compound annual growth rate (CAGR) of 7.8% between 2002 and 2020.
The blockchain economy is experiencing strong growth, and the evidence supports it. According to data from Fortune Business Insights, the global market size for this technology was USD $11.14 trillion in 2022. It is projected to grow from USD $17.57 trillion in 2023 to USD $469.49 trillion by 2030, at a compound annual growth rate (CAGR) of 59.9%.
The following graph illustrates the projected market growth associated with blockchain technology in North America. 3.39 5.25 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 North America Blockchain Market Size [2019 - 2030] USD Billion
On the financing side, venture capital has invested over $30 billion in cryptocurrency investments during 2021, which is more than the total amount raised in all previous years combined. Alongside this, many companies are emerging, with over 65 crypto unicorns, 40 of which were created in 2021. While the market growth surrounding blockchain technology has increased exponentially, it still represents a very small percentage of the global Assets Under Management (AUM). Therefore, it presents high possibilities for further growth and market expansion. This technology is a clear potential opportunity that is on the verge of becoming a protagonist in both cutting-edge and even more traditional industries.
As can be seen in the previous figure, today various blockchain solutions are already being applied across different industries. The convergence of the Banking, Financial Services, and Insurance (BFSI) industry shows the highest percentage of participation in terms of usage and application, as it greatly benefits from the advantages that this technology can offer to this sector:
Security and Trust
Efficiency and Cost Reduction
Transparency and Traceability
Smart Contract
Global Access and Decentralised Financing
The market size of consulting services, according to statistics from IBIS World, is estimated to be around $860.3 billion worldwide for 2023. As a sector, it has maintained a growth at a compound annual growth rate (CAGR) of 1% between 2018 and 2023.
Looking back, globalization, consolidation, evolving laws and regulations, efficiency, and technology have historically acted as the primary drivers of growth in the global consulting industry. This has become evident as over the years, the disruption of business and digital models has fueled sector growth, particularly in more mature markets.
Considering that blockchain technology is providing optimal solutions to various industries and markets, with its adoption becoming increasingly widespread, and that it still represents a small fraction of the total global assets under management (0.2%), the opportunity for both investors and asset managers and developers in the blockchain space is substantial. Furthermore, the projected growth rate is significantly higher (7x) compared to the overall CAGR of asset management.
