At the stage of its emergence, the blockchain technology caused a gold rush among Wall Street investors. This happens when the emergence of innovative technologies, such as artificial intelligence and virtual reality.
However, it soon changed into a pragmatic attitude, as investors began to rethink the costs and returns on investments.
This attitude is quite logical, since often the cost of integrating a blockchain exceeded potential benefits.
According to a recent Reuters report, the overwhelming majority of companies, financial institutions and the Wall Street exchanges that were the first to invest in blockchain projects were faced with the fact that most projects failed during the testing phase. Those who managed to move forward were not widely used.
The head of the strategic investment department of UBS AG, Hyder Jaffrey, compared the blockchain technology with a big bang. He believes that the disclosure of its potential may take about three to five years, then there will be a “market transformation.”
Since 2018, large financial institutions and technology companies are trying to apply technology in several sectors. For example, the UBS digital cash register utility settlement coin is used for financial transactions. Presumably, after five years of development, the project will start next year.
In its advertisements, IT giant IBM called for using blockchain technology to eradicate poverty. Recognizing the potential of technology, IBM CEO Marie Wieck (Marie Wieck) noted that the blockchain continues to demonstrate its prospects, especially in business.
The head of the department of digital investment banking in Spanish Banco Santander, John Whelan noted that blockchain projects should work taking into account demand and technology. The head of the Nasdaq technology market, Lars Ottersgaard, agrees with this statement:
“At first, the benefits of using the blockchain compared to traditional technologies were not obvious.”
Despite all the obstacles facing the introduction of blockchain technologies, Wall Street investments continue to gain momentum. In 2018, capital markets and banking institutions invested approximately $ 1.7 billion in related projects.
However, according to research and consulting company Greenwich Associates, compared with the figures for 2016, investments increased by about 70%.
This investment surge occurred due to lower initial and overhead costs. In addition, risk reduction and economical international payments stimulated to invest in the blockchain.
According to the research company IDC, by 2022 investment in blockchain projects will increase to $ 12 billion.