Fintech expert: 2024 might bring cryptocurrency spring, shift to regulated platforms and potential loss of new “unicorns”

Fintech expert: 2024 might bring cryptocurrency spring, shift to regulated platforms and potential loss of new “unicorns”
Sigita Kotlere

By Sigita Kotlere, CEO and a board member of Nectaro, a fully licensed investment platform

The global economic conditions and instability this year made it harder for the fintech industry to access funding, raise capital, and focus on their business growth. Overall funding for fintech companies decreased notably making 2023 a rough year – globally funding in H1 2023 alone fell by 17%, and its value stood at 52.4 billion U.S. dollars.

Until this year, we experienced the so-called Wild West in fintech

As the sector embarked on its promising skyrocketing breakthrough several years ago, there was an abundance of free money available. Companies could secure financing without any business plan but solely based on a concept. This led to the creation of many companies whose primary goal was not making money and achieving profitability but rather implementing unfounded ideas. However, economic turbulence ensued, marking the end of the Golden Age for such companies.

Indeed, the “fintech winter” has posed significant challenges, yet this demanding phase has been essential for a natural sifting process within the industry. During periods of rapid economic growth, companies frequently overlooked the importance of a well-thought-out business plan, comprehensive risk assessment, and strategic planning. However, the cyclical nature of the economy is inevitable, and after the “winter,” not everyone emerges successfully when the snow melts. Also, for the people who are in the fintech business right now, this is not their first rodeo, and they already are more prepared for various economic upheavals that might come. Now, there is a new era ahead that will enhance the industry and make it more mature.

From an investment platform’s perspective, consumers became more educated in their investment decisions. Previously, people were used to believing in beautifully packed promises and the main trigger for starting to invest was faster returns and how high the interest rate be. 2023 marked the beginning of building financial literacy more accurately than before – investors started to understand various circumstances that can affect their investment results, acknowledged the need for diversification in their investment portfolio, and more carefully weighed where to invest.

Nevertheless, the fintech industry is an evolving industry. When looking into 2024, yes, there still is a room for skepticism, but at the same time, the industry promises some interesting shifts:

Regulated investment environment:

consumers will shift to regulated platforms, while industry development paise will get slower. As regulatory bodies across the globe dive deeply into business and fintech is finding a common language with the regulator, the industry becomes more regulated, benefiting everyone involved. Consumers will realize why regulation is needed, first and foremost, for their safety, therefore a shift to only regulated platforms such as Nectaro is. From a business position, it is only natural that regulated business develops slower as it faces larger bureaucratic burden, hence the fintech scene as such in 2024 as such can be influenced.

Cryptocurrency spring:

The worse things go in traditional economics, the better the crypto market goes. Even though investments in crypto in 2023 declined significantly compared to previous years,  the latest months have shown steady growth that might get more rapid quite soon. Difficult times lead to riskier decisions and people tend to forget about previous losses, wanting to run after a quick profit. That’s why Next year is called the Crypto Spring.

The new generation of fintech startups may not receive their “golden ticket”.  While some fintechs may not survive in the current environment, others will come out strong, gain market share, and become more competitive. At the same time, the industry might miss great projects due to the current economic environment and cautious attitude to invest in fintech companies leaving such potential “unicorns” to struggle.


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