Forbes magazine shed light on the radical transformations that 2024 witnessed in the financial technology sector, as the focus returned to digital currencies after a period of decline, and the stagnation in initial public offerings (IPO) continued amidst unstable market conditions, while… Innovation systems in emerging markets have proven their resilience.
1. Cryptocurrencies return to prominence
The digital currency market witnessed a strong recovery, as the price of Bitcoin exceeded $100,000 for the first time in its history, driven by the interest of global institutions and economic factors.
Reports seen by Forbes stated that about 50% of traditional hedge funds showed exposure to digital assets, compared to only 29% in 2023, with 33% of these funds planning to increase their investments in digital currencies by the end of the year.
Central bank digital currencies (CBDCs) have also played an increasing role, as 134 countries, including G20 members, have begun developing these currencies, while countries such as India and Brazil have moved from the experimental stages to early implementation, according to Forbes.
One notable innovation has been the increase in the use of commodity-linked stablecoins, with the total market capitalization of these currencies reaching $1.3 billion by August 2024, with their use in e-commerce, money transfers and treasury management.
2. Stagnation in initial public offerings
Despite the improvement in economic indicators, initial public offerings were almost absent. Major companies such as Stripe and Klarna delayed their plans to go public due to market fluctuations.
But activity in the markets did not stop completely, as the sector witnessed prominent strategic acquisition deals, such as Capital One Financial Corp’s $35 billion offer to acquire Discover Financial Services, and an investor group’s $5.04 billion plan to transform the Canadian payments company Novi into a company. especially.
Cryptocurrencies have also continued to attract interest, with Stripe acquiring stablecoin infrastructure provider Bridge for more than $1 billion.
3. Emerging markets show high resilience
Emerging markets have confirmed their ability to innovate away from traditional centers of financial technology, according to Forbes.
Instant money transfer systems have witnessed remarkable progress in countries such as India and Brazil, as McKinsey reports expected a decline in dependence on the cash economy in emerging markets from 23% today to less than 10% by the end of the decade.
Major companies such as Nubank and Jio have emerged as regional powers that span across markets. Companies such as Delocal have also expanded their activities into South America, Africa and Asia, demonstrating the ability of emerging markets to achieve sustainable expansion.
While the focus on ESG financial companies has slowed due to weak returns, applications of generative AI have flourished in areas such as personal financial services, fraud detection and automation.
The year also witnessed the return of companies that were considered in decline, such as “Root,” as its share price rose from less than $10 at the beginning of the year to more than $70, a 7-fold increase.
