Blockchain Spending Will Grow to $9.2 Billion in 2021

Worldwide spending on blockchain solutions is forecast to reach $2.1 billion in 2018, more than double the $945 million spent in 2017, according to IDC. They expect blockchain spending to grow at a robust pace over the 2016-2021 forecast period with a five-year compound annual growth rate (CAGR) of 81.2% and total spending of $9.2 billion in 2021.

The United States will see the largest blockchain investments and deliver more than 40% of worldwide spending throughout the forecast. Western Europe will be the next largest region for blockchain spending, followed by China and Asia/Pacific (excluding Japan and China)(APeJC). All nine regions covered in the spending guide will see phenomenal spending growth over the 2016-2021 forecast period with Latin America and Japan leading the way with CAGRs of 152.5% and 127.3%, respectively.

Blockchain spending will be led by the financial sector ($754 million in 2018), driven largely by rapid adoption in the banking industry. The distribution and services sector ($510 million in 2018) will see strong investments from the retail and professional services industries while the manufacturing and resources sector ($448 million in 2018) will be driven by the discrete and process manufacturing industries.

In the U.S., the distribution and services sector will see the largest blockchain investments. The financial services sector will be the leading driver in Western Europe, China, and APeJC. The industries that will see the fastest growth in blockchain spending will be professional services (85.8% CAGR), discrete manufacturing (84.3% CAGR), and the resource industries (83.9% CAGR).

Within the financial sector, blockchain lends itself to a number of common use cases including regulatory compliance, cross-border payments & settlements, custody and asset tracking, and trade finance & post-trade/transaction settlements. From a technology perspective, IT services and business services (combined) will account for roughly 75% of all blockchain spending throughout the forecast with spending fairly well balanced across the two categories. Blockchain platform software will be the largest category of spending outside of the services category and one of the fastest growing categories overall, along with security software.