The pandemic-shutdown prompted concern in the so-called Crypto Valley of Switzerland that startups would go bankrupt. The fears were fully justified, but the boom of cryptocurrencies has helped the blockchain-hub escape from the worst.
The number of firms registered in the Crypto Valley, a region around the city and lake of Zug, has risen in the first half of 2020, their valuations tended to increase and rounds of financing were successfully concluded, according to the «Top Report», which was compiled by startup investor Crypto Valley Venture Capital (CV VC).
«Top Report» is a bi-annual report by CV VC, working together with its tech partner Inacta and PWC Strategy&.
In the first six months of 2020, the number of companies rose to 919 from 842 – however, this number refers to the whole of Switzerland and Liechtenstein, and not only to the Crypto Valley. The report hence refers to the «Crypto Valley Ecosystem».
Valuations Are Rising
The good news are continuing despite the difficulties encountered due to the pandemic, the report shows. The top 50 among the crypto firms have a combined value of $37.5 billion, with the Ethereum-network alone accounting for $25.3 billion. Ether is the second-most important cryptocurrency.
The number of people employed at one of the 919 firms in Switzerland and Liechtenstein remained almost flat at 4,784.
The top 50 crypto-firms attracted a total of $3.7 billion in new capital, despite the reluctance by angel investors and family offices, the report showed.
51 Up, 31 Down
The study authors suggested that the industry profited from rising cryptocurrency valuations, the advantages of the Crypto Valley ecosystem and the progressive set of regulation available for new firms in Switzerland and Liechtenstein.
The industry has added 51 new companies, the study showed. 31 firms dropped out – the «Top Report» didn’t provide a reason for the disappearance of these companies. After the lockdown took effect in Switzerland, the industry group – the Swiss Blockchain Federation – had sounded the alarm bells, suggesting that 4 out of 5 companies would run out of money within a couple of months only. That would cripple the ecosystem, the authors of the study had concluded at the time.
Emergency Loans Taken
The concern wasn’t born out by reality and the biggest firms in the ecosystem attracted still new money for their projects. The industry also received support from the Swiss state, with a total of 15 million Swiss francs ($16.5 million) being paid out as emergency loans.
