Should You Play the Long Game in Crypto

A ground-breaking item on the crypto industry has revealed proof implying firms that hang on for the long haul are more inclined to turn a profit.

These were the conclusions of a report by the Cambridge Centre for Alternative Finance, authored by Blandin et al., which surveyed 500 crypto enterprises worldwide.

The paper’s authors observed that the result was “unsurprising,” but explicated,

“The older the company, the more likely it is to be profitable. 80% of firms aged seven years old or older report having earned profits in 2019, compared to 60% for the three-four years-old age group and 64% for firms that are five-six years old.”

There were loads of positivity in the report, which decided that the “majority of the surveyed entities that have been running since 2017” stated that they had posted “operating revenues over the past three years” – rather than ending up in the red.

Source: The Cambridge Center for Alternative Finance

Still, the data reveals that the crypto sector’s fastest-growing firms are based outside Europe and North America – with Asia Pacific (APAC) -headquartered companies statistically more likely to be growing at a high rate.

The author’s classified firms expanding their manpower size by over 10% per year over three years as “high-rate” growers. They found that the majority of these firms are in [the APAC region], where 39% of surveyed enterprises active since at least 2017 can be defined as high-growth firms.

Source: The Cambridge Center for Alternative Finance

Technically, the lowest share of high-growth enterprises is found in Latin America and the Caribbean (LAC) region, where only just over a dozen surveyed firms met the same criteria.

Europe and North America posted at (respectively) just over and under the global average of 26%.

That being said, the authors added that the data shows that “high growth is primarily a young-firm phenomenon” – like approximately half of all high-growth firms surveyed globally were between three and five years old.

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