Declining Blockchain Investment in China: Trends and Insights

Blockchain Investment Decline in 2019

China’s blockchain spending has taken a hit in 2019, dropping over 40%. Despite the initial optimism in the sector, the total amount spent on investment deals fell to about 24.4 billion Chinese yuan (approximately $3.6 billion), according to a recent study by state-run sources.

A Year of Contrast: 2018 vs. 2019

Back in 2018, China witnessed a boom in blockchain investment with over 600 deals—an impressive feat compared to the mere 168 deals of 2017. However, 2019 saw only 245 investment and financing deals, a year-on-year decrease of nearly 60%.

Investment Breakdown: Early-Stage Versus Strategic

The 2019 study by the Xinhua and Rhino Data highlighted that early-stage investments, such as Series A funding rounds, accounted for a whopping 43.3% of all deals. In contrast, strategic investments and mergers noticeably ramped up in the latter half of the year.

Geographic Hotspots for Blockchain Projects

Several cities emerged as hotspots for blockchain innovation. Beijing, Shenzhen, and Hangzhou attracted the lion’s share of major blockchain projects, showcasing the regional disparity in investments.

Future Projections: A Turnaround Ahead?

Despite the dip in spending, projections remain optimistic. A study from the American market intelligence firm IDC predicts that China’s blockchain spending will exceed $2 billion by 2023. Moreover, the government’s push towards blockchain adoption, especially after President Xi Jinping’s remarks in October 2019, suggests a potential revival in interest and investment.