The global revenues for blockchain technology are reportedly forecasted to reach $10 billion by 2023.

ABI Research, a tech market advisory firm, released a report regarding global revenues from blockchain technology on August 28^th. According to ABI, the investments in the blockchain space will continue to rise in spite of the reduction in the initial coin offering (ICO) activities, which is due in large parts to venture capital (VC) investing in the development of blockchain infrastructure.

Venture capital funding a major factor

ABI claims that the VC is betting on ICOs as a form of funding, with a total amount of $3.1 billion in 620 rounds last year, up from $850 million in 153 rounds in the previous year. 

Michela Menting, ABI’s director of blockchain and digital security research said:

“Tighter regulation (including securities) and taxation (as foreign currency, income, financial asset, etc.) on cryptocurrencies in a number of countries are prompting investors to look beyond ICOs towards more stable VC-based investment for blockchain start-ups focusing on support infrastructure, retail, supply chain, and enterprise applications.”

Middleware class of blockchain applications

The revenue is strong, but even so, the blockchain use cases outside the insurance and finance industries are purportedly facing challenges due to the absence of a middle class of blockchain offerings, which can develop blockchain-as-a-service with applications generated from start-ups.

ABI still expects such ICOs to begin developing from 2021, with components except for platform-based ones, which is different from the current platform-oriented services. Moreover, Menting explained that she does not see crypto winter having a lasting negative effect:

“While the crypto-winter has dampened spirits somewhat despite successful completion of many pilots, the dip in enthusiasm is temporary and will serve to filter out the superficial and fraudulent offers from the market.”

As per the report from Blockchain Magazine yesterday, Algo Capital has raised $200 million, which is twice its original goal, for its VC fund.