Worldwide spending on blockchain is set to grow at a healthy pace in 2020 despite setbacks from Covid-19. According to the research data analyzed and published by StockApps.com, it is projected to increase by over 50% compared to 2019.
By the end of 2020, it will reach a high of $4.1 billion, compared to $2.7 billion in 2019. It will continue to grow at a compound annual growth rate (CAGR) of 46.4% over the subsequent five years. By 2024, worldwide blockchain spending is estimated at almost $18 billion.
One major reason for its tremendous growth is the fact that nearly every industry and market is re-evaluating core processes. A majority of the disruptions to these industries during the pandemic period were blown out of proportion by inefficiencies in existing processes.
To a great extent, the pandemic simply exposed existing weaknesses in financial services, supply chains and other sectors. This situation has drawn attention to blockchain as a solution for vulnerabilities in current systems and a platform for creating entirely new ecosystems.
Another report from Markets and Markets indicates that the global blockchain market is estimated to be worth $3.0 billion in 2020. It states that it will grow at a 67.3% CAGR during the period between 2020 and 2025 to a value of $39.7 billion.
Total spending on blockchain in 2018 was $1.5 billion and the financial sector accounted for nearly 60% of its market value. Fast forward to 2020 and according to the International Data Corporation (IDC), only about 29.7% of all spending on blockchain solutions will come from the financial sector. Notably though, it will still be the top spender globally.
Top use cases for blockchain technology in this sector include cross-border payments, transaction agreements and trade finance. Courtesy of these solid applications, the blockchain industry is estimated to maintain a robust pace of investment at 45.3% CAGR between 2020 and 2024.
Manufacturing (both process and discrete) is the next large sector accounting for 22.3% of all blockchain spending in 2020. Asset management and provenance will be the main use cases in the sector. Process manufacturing investment will grow at a 50.3% CAGR and 46.5% for discrete manufacturing.
Professional services, ranked as the fourth largest sector with a share of 6.6%, will have the highest five-year CAGR of 54.0%. Healthcare and state/local government will also show strong growth with a 49.3% and 48.2% five-year CAGR respectively.
With regard to the use cases, finance will once again take the dominant position. Interestingly though, all use cases identified will report robust spending growth with all CAGRs surpassing 40%. Asset management will have the fastest growth rate at 49.7% while finance will grow at a 49.4% CAGR.
From a technology point of view, IDC estimates that IT and business services will take the lion’s share of blockchain spending. Throughout the five-year period covered by the forecast, it will account for at least 70% of all spending.
IT services will have the fastest spending growth under technology, with a CAGR of 51.4% between 2020 and 2024. The second fastest growing category will be blockchain platform software with a five-year CAGR of 48.0%.
The US will take the lead in spending on blockchain solutions, contributing over $1.6 billion in 2020 to the total. Western Europe will be the second largest geographic market accounting for $1.0 billion while China will be third with $457 million. However, China will take the lead in terms of growth, with a five-year CAGR of 51.7%. Central and Eastern Europe will take the second spot with 50.4%.
In fact, China’s blockchain spending could soar to $1.061 billion in 2021 and $1.420 billion by 2022. Given that in 2017, total spending was $83 billion, the Chinese blockchain market has been growing exponentially.
Prior to the pandemic, the market’s blockchain sector was growing at a faster pace, 65.7% CAGR. In comparison, the APAC region was growing at a 50.3% CAGR and a global CAGR of 60.2%.
In terms of market size, the APAC region as a whole is expected to grow the fastest in 2020 according to Markets and Markets. In 2020, North America holds the largest market share at 32%. Europe is second with 30% while APAC takes the third spot with 22%.