Crypto is one of the tech sectors hardest hit by this year’s economic downturn.
But the current market instability – which has included mass layoffs at European companies like Blockchain.com and Bitpanda, and the collapse of several cryptocurrencies like Terra USD – has not deterred VCs from investing. They still believe it will eventually lead to a financial revolution – or at least tasty returns.
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But what about the people who actually buy cryptocurrencies?
App Radar analyzed the number of downloads that major European crypto apps attracted in the first half of 2022, compared to the first half of 2021 (using Google Play Store data).
The results, shown below, reveal that these ten apps were downloaded 4.1 million times in the first half of 2022, down 45% from the first half of 2021, when they had 7.5 million downloads. downloads.
Only three crypto apps – crypto exchanges Bitstamp, Change and Coinmetro – saw a marginal increase in downloads compared to last year.
It’s perhaps no coincidence that the apps that have seen the biggest declines in popularity have also been grappling with broader business issues.
Bitcoin mobile wallet BRD saw the biggest drop in user downloads since last year, dropping 97% from 1.6 million in the first half of 2021 to 48,000 in the second half of 2022. According to market analysts , its digital asset token BRD — “Pain” — is among the top 14% of the most volatile cryptocurrencies in the market.
Beleaguered Austrian crypto-trading platform Bitpanda saw a 65% decrease in app downloads, from 563,000 in the first half of 2021 to 197,000 in the first half of 2022. In June, the company fired a third of its employees, admitting that it had hired too quickly and needed to cut spending amid the crypto market rout.
Blockchain.com in the UK, meanwhile, saw its app downloads drop 51% year-on-year. The company recently made layoffs equivalent to 25% of its global staff and suffered the fallout from the collapse of crypto hedge fund Three Arrows Capital in July.
The split between professional investors
VCs tell Sifted that the cooler economic climate means they are scrutinizing the performance of their portfolio companies even more than usual.
Metrics like user downloads are one of the key stats they will keep an eye on as a barometer of growth. Of course, an app download does not necessarily translate into engagement and therefore transactions and revenue. But if the number of potential transactions from new users starts to decline, it will cause problems for revenue growth, which in turn will affect a company’s valuation.
However, all this does not seem to have hurt the overall venture capital investment in the sector.
Last year, VCs poured $2.9 billion into European crypto startups, according to data from Dealroom, which was a big increase from the $431 million invested in 2020. So far in 2022 , the figure stands at $1.9 billion – suggesting that at the end of the year the investment may be in line with last year’s figurebuoyed amid a broader market downturn by some fairly large later-stage fundraising from traditional VCs.
Retail investors are understandably going to be spooked by the collapse of top-tier cryptocurrencies like Terra USD, or the insolvencies of lenders they relied on for crypto like Nouri from Germany and Celsius in the United States. Although venture capitalists may argue that they are in it “for the long haul” and that declines are part of a cycle, for ordinary investors who are putting their hard-earned money on the line, it can be more difficult to maintain trust.
Amy O’Brien is a reporter at Sifted. She tweets from @Amy_EOBrien and writes our fintech newsletter — You can register here.
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European Crypto App Downloads Nearly Halved From 2021
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