KPMG: Crypto Firms Will Be Forced To Lower Valuations To Stay Afloat In 2022

Zinger Key Points
  • The consulting firm found that the value of crypto deals fell to $14.2 billion in 2022 after a record-breaking 2021
  • According to KPMG, crypto companies with healthy risk management policies will most likely survive the rest of 2022

New research from KPMG finds that crypto firms will be forced to cut their valuations in order to stay afloat in 2022. 

What Happened: Alexandre Stachtchenko, KPMG’s head of blockchain and crypto assets, said in a recent report, “Looking ahead, we are going to see some cryptos cutting their valuations and working to raise money because it’s their only option.”

“They’d rather raise money and be capitalized at a lower valuation rather than not doing so and taking the risk of dying out,” added Stachtchenko.

The consulting firm found that the value of crypto deals in 2022 fell to $14.2 billion, considerably lower than the record-shattering $32.1 billion in blockchain and investment activity in 2021.  

Still, the level of investment activity in 2022 far outpaces what was seen in 2019 and 2020, which highlights the “growing maturity of the space,” said KPMG.

Crypto companies with healthy risk management policies are more likely to survive in 2022 than others, noted Stachtchenko.

“Of course, some cryptos will die out — particularly those that don’t have clear and strong value propositions. That could actually be quite healthy from an ecosystem point of view because it’ll clear away some of the mess that was created in the euphoria of a bull market,” he said.


Price Action: The crypto market saw a 5% decline in the last 24 hours. At the time of writing, Bitcoin BTC/USD was trading at $18,826, down 6.5% and Ethereum ETH/USD was trading at $1,536, down 8% over the last day.

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