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It Pays to Play the Long Game in Crypto – and Here’s the Proof

A ground-breaking report on the crypto industry has uncovered evidence that suggests firms that hang on for the long haul are more likely to turn a profit.

Source: Adobe/Maksym Yemelyanov

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

The paper’s authors remarked that the discovery was “unsurprising,” but expounded,

“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.”

In fact, there was plenty of positivity in the report, which concluded that the “majority of the surveyed entities that have been active since 2017” stated that they had posted “operating revenues over the past three years” – rather than ending up in the red.

Source: The Cambridge Centre for Alternative Finance

However, the data shows 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 authors classified companies expanding the size of their workforce by over 10% per year over a three-year period as “high-rate” growers and 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 Centre for Alternative Finance

Conversely, the lowest share of high-growth enterprises is to be found in the 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 said, the authors added that the data shows that “high growth is primarily a young-firm phenomenon” – as almost half of all high-growth firms surveyed globally were between three and five years old.
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