Skip to main content

Switzerland’s Famed “Crypto Valley” Seeks $103 Million Government Bailout

Switzerland's Famed "Crypto Valley" Seeks $103 Million Government Bailout

Switzerland’s “crypto valley” is asking the government for 100 million Swiss francs ($102.7 million) in funding, local media reported.

The once flourishing Swiss cryptocurrency industry is struggling to survive following the withdrawal of private equity investors.

About 80% of 203 firms surveyed by the Swiss Blockchain Federation recently warned of imminent bankruptcy. Only half of the 50 biggest companies in crypto valley expect to last a year in business.

Now, the industry is turning to government, requesting for a fund that is expected to draw on federal guarantees, local government and private investments, according to Zug finance director Heinz Taennler.

The celebrated blockchain hub is located in Zug and other towns of Switzerland and Liechtenstein.

Taennler noted that the 154 million francs credit facility for startups recently announced by the Swiss government will not be enough for the cryptocurrency sector’s ambitious financing needs. He wants a separate, dedicated fund for Zug companies.

While start-ups are generally threatened by the Covid-19 impact, “crypto valley”’s loss of venture capital constitutes an underlying condition.

A mid-2019 analysis of the 50 top companies valued them at $40 billion, which was two times their value at the beginning of the year. The report also listed six unicorns. As a whole, the “crypto valley” had more than 800 companies with over 4,000 employees.

However, even then, a number of companies like Tend had already started to close shop without revealing much about their disappearance. Crypto Valley Association (CVA) president Daniel Haudenschild indicates that the hub is a hardened community whose members simply take up a new venture after one fails.

According to marketing firm Relevance House co-founder German Ramirez, it is normal for 80% of startups to fail in any industry, outside the Covid-19 impact. The picture of contrasting fortunes in the 2019 survey may support his view and lend case against recent reports about the “drying up” of the Zug-centred crypto industry.

Historical funding challenges, as well as decreased risk appetite by investors have prompted the “crypto valley” to turn to government though Haudenschild maintains:

The modus operandi of the crypto scene does not include surviving on state handouts – we are not a state-sponsored industry.

Ramirez predicts long-term success for Swiss crypto startups as blockchain innovations are expected to disrupt traditional financial infrastructures after the pandemic. The CVA president says the sector is already hardened by adversity including being frozen out by banks, which then cannot be expected to issue the firms emergency loans.

What do you think about the funding needs of the Swiss cryptocurrency industry? Let us know in the comments section below.

The post Switzerland’s Famed “Crypto Valley” Seeks $103 Million Government Bailout appeared first on Bitcoin News.



from Bitcoin News https://ift.tt/2zEnDK7
Labels:

Comments

Post a Comment

Popular posts from this blog

Mt Gox Creditors Updated, Trustee Says Rehabilitation Custodian Is ‘Currently Preparing to Make Repayments’

On August 31, 2022, the Mt Gox trustee Nobuaki Kobayashi explained in a recent letter that the rehabilitation custodian is “currently preparing to make repayments” to Mt Gox creditors. Trustee Updates Mt Gox Creditors — Repayment Date and Exchange Still Unknown Last week speculation and rumors concerning the release of 140K bitcoin ( BTC ) from Mt Gox littered social media platforms and headlines. Bitcoin.com News covered the situation six days ago as a number of people and Mt Gox creditors called the rumors “ fake news .” During that same period of time, a bitcoin whale transferred 10,000 BTC to unknown wallets, and a 2018 annotation , heuristics, and clustering methods show the funds likely originated from the June 2011 Mt Gox hacks. Following the mysterious whale transfer, last Wednesday, Mt Gox published an official update from the court trustee Nobuaki Kobayashi that explains the court is “currently preparing to make repayments” to creditors. Mt Gox creditors have been wait...
Post a Comment
Read more

Fidelity Discusses Bitcoin as Portfolio Insurance — Could Soon Stand in ‘Stark Contrast’ to Path Fiat Currencies Take

Fidelity Digital Assets, a subsidiary of Fidelity Investments, says that bitcoin could be considered portfolio insurance. The firm notes that the cryptocurrency “may soon stand in stark contrast to the path that the rest of the world and fiat currencies may take — namely the path of increased supply, additional currency creation, and central bank balance sheet expansion.” Fidelity Says Bitcoin Could Be Portfolio Insurance Fidelity Digital Assets, a subsidiary of Fidelity Investments, recently published a research study titled “The Rising Dollar and Bitcoin.” The research outlines “how bitcoin could be considered portfolio insurance” as the rising dollar impacts global currency markets. “The strengthening U.S. dollar is wreaking havoc among other countries and may put pressure on the Federal Reserve to soon reverse its tightening monetary actions, something that has precedent based on 1985’s Plaza Accord,” Fidelity explained. In addition, “more monetary debasement may be needed to ...
Post a Comment
Read more

Economists Discuss Russia, China Potentially Developing Gold-Backed Currency That Could Undermine US Dollar

Economists have weighed in on reports that China and Russia may be developing a new gold-backed currency that could undermine the U.S. dollar’s status as the world’s primary reserve currency. Russia and China May Be Developing Gold-Backed Currency Several experts have shared their views on Russia and China potentially creating a new gold-baked currency, Fox Business reported Saturday, emphasizing that China has been buying up huge quantities of gold while Russia was forced off the U.S. dollar due to sanctions imposed on the country following its invasion of Ukraine. The news outlet noted that some experts have cautioned that these moves, along with the closer relationship that has developed between Moscow and Beijing, point to the likelihood of China attempting to launch a gold-backed currency. However, neither Russia nor China has officially confirmed plans for such a currency. Craig Singleton, senior fellow at the Foundation for Defense of Democracies and a former U.S. diplomat,...
Post a Comment
Read more