Accordion Announces Strategic Growth Investment from Charlesbank Capital Partners and Motive Partners Copy 3
The cryptocurrency market cap has grown~6x in 2021
Starting from a base of $0.5trillion in January the market reached anew all-time-high of ~$3.0 trillion in November. Several trends have emergedamongst the growth that allude to thefuture direction of the emergent industry.Firstly, capital raised in the space hasexploded. According to Pitchbook datacrypto and blockchain firms raised over$80bn in 2021, more than in the entiretyof their prior history combined.Secondly, the rapid growth of new categories of crypto assets has been morepronounced. Bitcoin dominance slippedfrom ~70% at the start of the year tonear all-time lows of ~40% at the timeof writing. Within these new categoriesthree have stood out:The cryptocurrencymarket cap hasgrown ~6x in 2021• Competing “Layer 1” networks:Ethereum, Solana, Avalanche, Luna,Cardano and more have expanded torepresent ~30% of total market cap.The fragmentation of investment suggests a “multi-chain” future rather thana winner takes all outcome. Investmentis now accelerating for interoperabilitysolutions for cross-chain transfers.• Decentralised Finance (DeFi) has ballooned to be an $80 billion industry.
Offering high-yields on stable assetsand a decentralized way to swap, tradeand lend the market is now attractinginstitutional interest via permissionedpools, reducing counterparty risk whilstoffering the same financial benefits.• The Metaverse has captured the markets attention, with parcels of virtualland selling for upwards of $2.4 millionand a virtual yacht recently selling for$0.65 million. Crypto investment giantGrayscale predicts Metaverse could bea $1 trillion future opportunity alone.INSIGHTS MOTIVEinsightsThe Future of CryptoCustomer demand has also driven aclear acceleration of traditional financialinstitutions into the space. Banks and Investment Managers including GoldmanSachs, Morgan Stanley, Fidelity, Vanguard, BlackRock and many more nowoffer clients the ability to gain exposureto crypto through their channels.For traditional institutions, crypto enables a new (and often higher margin) feerevenue stream as well as the ability totap into the growing interest and wealthof a younger generation of clients.
82% of wealth managers expecting to increase their crypto exposure over the next two yearsthis looks like a category primed forgrowth.
With~65% of crypto investors under the ageof 45, compared to 75% of equity investors who are over 45, this is a clear opportunity to attract and serve a younger expanding demographic. With the“great wealth transfer” expected to see$30 trillion transferred into the handsof Millennials and Gen Z over the next30 years, engaging this cohort is increasingly a strategic imperative.A growing universe of FinTech platforms are facilitating institutional access, providing a suite of digital asset servicescovering everything from research, brokerage, payments, KYC & compliance,portfolio management, custody andmore. Pitchbook data shows this newcohort of FinTechs raised $10 - 20 billionin 2021, and with 82% of wealth managers expecting to increase their crypto exposure over the next two yearsthis looks like a category primed forgrowth.There remains significant uncertainty inthe growth trajectory of the digital assetmarket with macro headwinds, regulatory uncertainty and volatile market appetite all presenting significant risk factors,however with benefits on offer for all participants it seems clear that the market is