Skip to main content

The Global Pandemic Ends Blockchain Market Volatility

IT vendors seeking to convince CIOs and CTOs about their blockchain-related solutions have been challenged by an apparent shift in market perception. Distributed ledger technology hype reached a peak and as a result, the upside growth potential had fallen significantly.

Global blockchain revenues fell by 35 percent between 2018 and 2020. According to the latest worldwide market study by ABI Research, the potential loss could have reached $2.8 billion.

Moreover, the reported 'crypto winter' of 2018 removed 80 percent of the aggregate market cap, and more than 2,000 cryptocurrencies collapsed. However, that market correction was enlightening.

Blockchain Market Development

This dampened overall blockchain adoption significantly in other markets, with many startups folding and different verticals showing a distinct lack of market adoption. Furthermore, the COVID-19 pandemic had a significant impact on investment opportunities and appetite for new blockchain applications.

That said, according to the ABI assessment, this dramatic dip in revenue will likely be short-lived. These adverse events culled much of the IT vendor hype and effectively ended the prior blockchain market speculation.

"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," said Michela Menting, 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. The pandemic has had some positive impacts on select blockchain applications, most notably supply chain and logistics management -- due in part to the international scramble for medical systems and personal protective equipment (PPE) supplies.

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 could boost revenue for blockchain applications focusing on use cases in the manufacturing, transport, and storage sectors -- as well as within retail and consumer markets.

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.

Outlook for Blockchain Applications Growth

"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," concludes Menting.

I believe that the global pandemic will continue to drive additional high-growth opportunities for the savvy IT and networking vendors that are able to capitalize on global market disruptions and associated trends.

As an example, in addition to the renewed blockchain technology upside, there will be an increasing demand for comprehensive cloud-based enterprise access security solutions for remote workers. More CIOs and CTOs will be seeking new information and guidance on this key DevSecOps topic.

Popular posts from this blog

IoT Device Management Demand Gains Momentum

More forward-thinking CIOs and CTOs are focused on the adoption of the Internet of Things (IoT). Management challenges are top of mind for those who have already deployed a large number of sensors and associated network edge devices. Device management services are evolving in response to a greater breadth of new device technologies such as edge intelligence and related connectivity solutions, as well as the customer scalability and security of IoT deployments. But forward-looking suppliers are also preparing for a world where 41.3 percent of the connected devices will be using some form of Low Power Wide Area (LPWA) technologies by 2026. IoT Device Management Market Development Since IoT customers increasingly need to manage a larger fleet of connected devices, ABI Research now forecasts that IoT device management services will exceed $36.8 billion in revenues by 2026. Standardization is beginning to play a bigger role in device management services, as more connected devices use LPWA t

Anywhere, Anytime Workplace Demand for SASE

The ongoing adoption of flexible working models within the enterprise market has significant implications for typical IT organizations that must now support knowledge workers and front-line employees that operate outside the corporate network perimeter. The global COVID-19 pandemic created IT networking and security challenges. The expansion of the distributed workforce, an increasing reliance on cloud computing infrastructure, and the requirement to securely connect online employees -- wherever they choose to work, at any given moment in time. Legacy IT solutions that have rigid network underlays and a requirement for on-premises infrastructure cannot adequately deal with these trends. This 'Anywhere, Anytime Workplace' led to demand for new Secure Access Service Edge (SASE) solutions, with networking and security delivered as-a-service. Anywhere, Anytime Workplace Market Development   Although converging networking and security capabilities offer enterprises a promising solut

Cloud Edge Computing Demand Continues to Grow

Public cloud computing solutions are moving closer to the edge of networks where CIOs and CTOs are hosting new apps. The edge journey is well underway for forward-looking organizations as they seek to connect with customers, improve operational efficiency, and adopt digital business technologies to drive innovation. The latest worldwide market study by International Data Corporation (IDC) found that three-quarters of organizations plan to increase their edge computing spending over the next two years with an average increase of 37 percent. A combination of factors is driving this increased spending at the edge. Cloud Edge Computing Market Development The performance requirements of expanding workloads and new use cases that leverage artificial intelligence (AI) and machine learning (ML) demand greater compute capacity at the edge. In addition, the amount of data being stored in edge locations are rapidly expanding, and organizations plan to keep this data longer. As a result, the numbe