Even though fintech investments in the EU reported a decrease in the first half of 2023, investments in crypto businesses rose in the same period.
An investment firm in Amsterdam, Finch Capital, has released a report on Europe’s overall fintech investments scenario. The report, titled “State of European FinTech,” has shared interesting insights on the subject. It stated how fintech investments had decreased in Europe in the year’s first half. Even then, the report revealed how crypto businesses had received the highest investments in the sector.
Investments in crypto firms lead overall deals in countries like the Netherlands, the United Kingdom, France and Germany. In the Netherlands, 25% of all fintech deals involved investments in crypto companies. Broadly, fintech investments in Europe, Africa and the Middle East fell to $11.1 billion in the first half of 2023.
The lending sector was the only competitor to crypto firms in the regions, dominating markets like Ireland. The report noted, “A retreat in Payments and Challenger Banks as the traditional resilient sector loses its crown to Crypto and Lending given valuation benchmarks achieved in 2022,” referring to the gains of the crypto industry.
The positive news for crypto businesses in Europe does not come as a surprise. The region has been proactive with the sector, with clear crypto regulations. After the EU passed the MiCA legislation, crypto firms could have found a better regulatory framework for operating in the region.
Meanwhile, the report also stated the digital economy was still attracting active investors. Most investment firms had adopted a strategy for digital assets, it said.