In 2024, Australia’s fintech industry experienced considerable decline, with over 7% of businesses closing. Recent studies indicate that blockchain and cryptocurrency firms suffered the most, with a sharp 14% decline, leaving only 74 active companies in the industry.
The number of fintech companies decreased from 800 in 2022 to 767 by December 2024. Approximately 4.5% of the 60 enterprises that completely discontinued their operations did so due to mergers or acquisitions, while 3% did so due to other factors. Many of these mergers were strategic, with buyers looking to improve specific competencies.
The decline in blockchain and cryptocurrency enterprises is attributable to more than just internal issues. Rising interest in artificial intelligence has diverted investor attention and resources away from the sector, contributing to its collapse. Despite these problems, there is hope that global factors would spark a recovery in 2025.
The recent approval of spot Bitcoin exchange-traded funds (ETFs) in the United States may provide a much-needed boost, perhaps attracting fresh investment into the Australian crypto and blockchain industry. Furthermore, predicted interest rate decreases in the United States may make alternative investments such as cryptocurrency more appealing, encouraging the formation of new blockchain companies in the coming year.
We expect Australia’s regulatory changes to impact the industry. The Australian Securities and Investments Commission (ASIC) has recommended a comprehensive licensing system for cryptocurrency companies, with the goal of making the industry more structured and transparent. Meanwhile, the Australian Transaction Reports and Analysis Centre (AUSTRAC) intends to increase its regulation of the cryptocurrency sector in 2025, focusing on areas prone to abuse.
While the current environment presents obstacles, these developments may pave the way for a potential rebound, opening up new chances for blockchain and cryptocurrency companies in the near future.
