The UK economy has faced significant challenges in recent years due to various factors: Brexit uncertainty, global economic slowdown, and the COVID-19 pandemic. These challenges have negatively impacted multiple sectors, including fintech investment and cryptocurrency.

According to a report by Innovate Finance, a trade association for the UK fintech industry, fintech investment in the UK dropped by 39% in 2020 compared to 2019. The decline can be attributed to several factors, such as the economic uncertainty caused by Brexit, the pandemic, and the tightening of regulations.

While 2020 was the beginning, last year witnessed a similar outcome – evident in KPMG’s Pulse of Fintech report shared with BeInCrypto by Bloomberg. The fintech sector saw a decline in funding from $22 billion, with 724 deals to $17 billion, and 593 deals in 2022. The report attributes the drop to ‘higher interest rates, inflation, and declines in valuations hitting investor appetite.’

The drop here mirrored the decline in investments for one of the cohorts – cryptocurrency. Global investment in crypto and blockchain firms fell from $30 billion in 2021 to $23.10 billion in 2022. Not surprisingly, the crypto contagion triggered by collapses such as FTX last year had a rippling effect on the entire fintech domain.

(By Shubham Pandey)

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