The cluster of blockchain companies, which now reaches far beyond the canton of Zug, underwent rapid growth in 2023, a new study has found. But it also shows the multi-billion-dollar industry is still cyclical.
«Crypto Valley» has nothing to fear from being compared with Bitcoin. The oldest and most well-known digital currency appreciated by 160 percent against the dollar last year, compared with a 106 percent year-on-year increase in the valuations of the blockchain organizations in the cluster. The trend was captured by the ninth and latest edition of the CV VC Top 50 Report published by the eponymous venture capital and consulting firm from Zug on Wednesday.
The industry barometer is no longer limited to the original Zug hub, where pioneers such as crypto broker Bitcoin Suisse and Ethereum Foundation laid the groundwork for a vibrant scene with global influence. The «Valley» also encompasses all of Switzerland and the Principality of Liechtenstein. CV VC counted 1,290 companies in this market, 1,224 of which were in Switzerland and 66 in Liechtenstein.
Deep Crypto Winter
By some distance, most companies (512) are still domiciled in Zug, with Zurich (289) and Geneva (115) trailing far behind. 61 companies are in Ticino, 57 in Vaud, 30 in Bern, 28 in Schwyz, 22 in Lucerne, and 21 in Neuchâtel. The distribution in Liechtenstein is clear. With 52 companies, the capital Vaduz has the lion’s share.
These players have a combined total valuation of 382.93 billion dollars, as noted in the report. But 2022 was still marked by a deep «crypto winter». Tokens and coins did not enter into a bull market until the second half of 2023. Ever since then, prices have really taken off.
Cyclical Nature
That this has led to a doubling of valuations in the «Crypto Valley» underscores the sector’s cyclical nature once again. The region is home to a particularly large number of foundations, which are tied to globally traded digital tokens such as Ether, Solana, and Cardano.
Ten of these blockchain projects have already achieved coveted «unicorn» status due to the jump in the value of their tokens so that they are worth more than 1 billion dollars (see chart below).
If the business model is evaluated, only three blockchain start-ups can currently call themselves unicorns (see chart below). The market value of the top 25 companies has also fallen since 2022 and stands at 9.48 billion dollars, according to CV VC.
Considerable Appeal
New financing rounds have also contributed to the valuation; the scene once again gained considerable appeal in this regard in 2023. The blockchain startups in the «Crypto Valley» raised a total of 283.5 million dollars in 47 deals.
