Swiss Crypto Valley grow last year despite crypto winter
The falling prices of digital assets in the past months have affected major crypto and blockchain companies with offices in Switzerland and Liechtenstein. The top 50 saw their valuation drop from $44 billion to $20 billion in the fourth quarter of 2018.
The study, produced by investment company CV VC in collaboration with PwC Strategy & and IT partner inacta, provides an overview of the current state of Switzerland and Liechtenstein’s Crypto Valley, highlighting the rapid growth of the ecosystem despite the industry’s “crypto winter.”
“Crypto winter,” as 2018’s severe market reversal has been nicknamed, has affected the valuation of blockchain companies, which saw the market valuation of the 50 largest blockchain ventures in the region plunge from $44 billion to $20 billion in the fourth quarter of 2018.
According to Mathias Ruch, founder and CEO of CV VC, the new report clearly reflects the market correction that started in early 2018, which is significantly based on cryptocurrencies. However, findings also show that companies developing blockchain-based applications and infrastructure solutions have been able to keep up, while an impressive number of new startups with innovative use-cases have risen to the top.
On average, the top 50 companies are valued at $400 million each and there are four blockchain unicorns present in the region: Bitmain, Cardano, Dfinity, and Ethereum, according to the report.
The 50 largest companies have around 480 people working in their offices in Switzerland and Liechtenstein, while the whole sector employs over 3,300 people. These and other numbers in the report indicate that the current situation is ‘business as usual’ for many entities, despite the drop in the market value of most cryptocurrencies.
The researchers have also found that the Crypto Valley is expanding geographically. While over half of the companies (51 percent) are based in Zug, other Swiss cantons are now home to the rest. According to the compiled data, 42 of these businesses are registered in Geneva and 39 in Ticino. Liechtenstein is another hotspot with 38 companies from the sector. CVVC maintains an online map that shows where the crypto startups are located.
15 companies entered the top 50 in the fourth quarter of 2018 compared to CV VC’s previous quarter report including HDAC, an Internet-of-Things (IoT) platform supported by Hyundai, ICON, a platform that allows various blockchains to interact with each other via smart contracts, and Santiment, a platform offering cryptocurrency data sets, real-time market signals and industry insights.
Dr. Daniel Diemers, blockchain leader, EMEA at PwC Strategy, said: “This high dynamic in the middle of the crypto winter is very positive. It shows that the appeal of Switzerland as one of the world’s most attractive locations for blockchain startups remains unbroken.”
Switzerland and Liechtenstein, along with Malta, Gibraltar, Estonia, and the Isle of Man, are part of a group of European jurisdictions making efforts to create a crypto-friendly business environment. The expansion of the Swiss Crypto Valley has been facilitated by the country’s decentralized political system and strong traditions in providing financial privacy. Last month, the government in Bern adopted a comprehensive strategy for the development of the crypto sector.