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After the bankruptcy of cryptocurrency exchange FTX, Crypto Valley, a blockchain project incubator founded in the canton of Zug and inspired by the Swiss Silicon Valley, is aiming for a major revival.
In recent years, Switzerland has seen an influx of Bitcoin and Blockchain companies thanks to its favorable tax rates, laws and open attitude. More than a thousand such companies have opened offices in the wealthy Alpine country, most of them in the canton of Zug, south of Zurich, where they can pay taxes with Bitcoin and Ether.
FTX Collapse Could Trigger A Turnaround
But the collapse of FTX, once the world’s best-known cryptocurrency exchange, in November 2017 and the subsequent bankruptcy of bitcoin lender Genesis slowed the industry’s long-running frenzy.
He said conditions before and after the FTX collapse set the sector back two years.
Dirk Klee, director of Bitcoin Suisse, told AFP: “A lot happened in 2022, such as the bankruptcy of FTX, Earth/Moon, Three Arrows Capital and cryptocurrency investment platform Celsius.
These events showed the shortcomings of some institutions that had not yet followed regulatory procedures.” Klee also stressed that the work is still in its infancy.
Total Losses In Excess Of 200 Billion
According to the Bank for International Settlements (BIS), some $450 billion was lost in the market turmoil following the collapse of Earth/Moon, while another $200 billion was lost in the FTX bankruptcy.
According to Mathias Ruch, founder and chairman of CV VC, a fund specializing in blockchain companies, the failure of FTX will set the sector back at least two years.
Small Companies Can Herald Failure
CV VC’s survey found that there were 1,135 cryptocurrency and blockchain startups in Switzerland and Liechtenstein in 2018, an increase of 0.6% compared to 2021.
By contrast, the number of so-called unicorns – startups worth more than $1 billion – fell from 14 in 2021 to nine in 2022, and the number of jobs in the sector fell 4% to fewer than 6,000.
Jerome Bailly, one of the heads of Crypto Valley, warned that it could be harder for smaller startups to survive in these tough times, although last month cryptocurrency startup Taurus received investment from elite institutions such as Credit Suisse and Deutsche Bank.
It Had Great Potential
Both Bailly and Ruch attribute the sector’s turmoil to the bursting of the dotcom bubble in 2000.
However, Ruch stresses that this was not negative for the sector, as major giants such as Google and Amazon rose from the ashes of the dotcom collapse: “I think the potential is huge.
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