Nearly half a trillion dollars has been wiped off the valuation of fintech firms so far this year when their current value is compared to their peak valuation.
However, the belief that the pandemic would accelerate the migration to digital financial services, has been challenged by macro-economic events that have seen inflation increase at a global level with rising interest rates.
This has also led more investors to question the untested business models and lack of profits at some fintechs, consequently cooling the investor sentiment around the sector. In addition, the cumulative market capitalization for fintechs has fallen by $156 billion in 2022.
An analysis from the Financial Times has shown that the share price of listed fintechs has dropped by 50% so far this year, almost twice as much as the drop in conventional markets - the Nasdaq Composite has fallen by 29% during the same period.
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