Worldwide blockchain revenues fell 35% between 2018 and 2020, according to analyst firm ABI Research which calculated the potential loss to hit $2.8 billion.
The 2018 crypto winter wiped 80% of the total aggregate market cap, and since then, more than 2,000 cryptocurrencies have collapsed, ABI said.
This has dampened blockchain adoption significantly in other markets, with many startups folding and different verticals showing a distinct lack of uptake.
Further, the Covid-19 pandemic had a significant impact on investment opportunities and appetite for new blockchain applications, ABI noted.
However, the analyst firm said the dramatic dip in revenue will be short-lived. The adverse events culled much of the hype and effectively ended the blockchain rush.
“Many speculative offerings were purged from the marketplace. However, this will be relatively beneficial for the blockchain ecosystem overall, strengthening existing startups and ensuring sounder and more valuable business models emerge over the next few years. ABI Research expects the market to get back to 2018 revenue levels by 2023,” explained Michela Menting, digital security research director at ABI Research.
The vertical markets poised to take advantage of the new traction are those where successful business use cases are currently applied, it said. The pandemic has had some positive impacts on select blockchain applications, notably supply chain and logistics management (due in part to the international scramble for medical and healthcare equipment, such as masks, Personal Protective Equipment (PPE), ventilators, testing kits, etc.).
“The pandemic also revealed the inadequacies and flaws of existing procedures, especially in terms of transparency and quality assurance. Blockchain is now a technology that is recognized as capable of addressing these issues. As such, interest and demand will boost revenue for blockchain applications focusing on manufacturing, transport, and storage, as well as on retail and consumer,” Menting said.
Beyond that, interest in blockchain applications for healthcare is soaring, notably for sharing timely, relevant, and authenticated information on the pandemic (including regarding the spread of infection, containment practices, hygiene-based information, data related to trials and vaccine research, etc.), especially in light of misinformation increasingly being spread online and through social media.
“Blockchain projects launched by the United Nations’ World Health Organization, alongside many national Centers for Disease Control, show the usefulness of blockchain in these circumstances. Healthcare applications are expected to increase faster than anticipated in light of the pandemic,” said Menting.