COVID-19 could deal a heavy blow to 90% of Swiss Crypto firms
Experts urge the Swiss government to take an active stance in the preservation of crypto firms amidst the threat posed by the pandemic.
Unless the government steps in, an estimated 90% of cryptocurrency and blockchain firms in Switzerland could go bankrupt over the next six months. The magnitude of this risk stems from the size of most crypto businesses, as well as the fact that cryptocurrency is still an emerging industry.
These results are from a survey conducted by the Swiss Blockchain Federation between March 31 and April 3, 2020.
Over the past few years, Switzerland has slowly built a reputation for blockchain and crypto innovation, with national legislation generally favourable to the industry. Today, it is a source of employment for more than 4,000 people and home to 800 crypto firms.
Out of these 800 firms, it was revealed that an overwhelming 80 to 90 percent believe that they may not make it past the pandemic.
With the coronavirus outbreak putting a stop to investments around the world, startups in the crypto industry may not have the funds to continue operating throughout the pandemic. In addition, they may not qualify for government loans or have any backup revenue to fall on.
However, this is not the first major challenge that this emerging industry has had to deal with. The outlook for crypto as a whole remains positive, as businesses look for ways to circumvent the new difficulties posed by the coronavirus.
President of the Crypto Valley Association, Daniel Haudenschild, explains that efforts to bail out businesses would not be welcomed because they would not fit with the spirit of the industry.
“The modus operandi of the crypto scene does not include surviving on state handouts – we are not a state-sponsored industry,” he explained.
Crypto startups are not the only businesses reeling from the pandemic; across the board, organisations are struggling to keep business afloat—particularly in sports and entertainment.
One important quality of startups to note is that a large part of their success depends on how well they network and find connections. With the pandemic raging across the globe, they will be hard-pressed to find alternatives to crowdsourcing, finding angel investors, or simply raising awareness for their brand.
As of writing, Switzerland is dealing with over 29,586 positive cases of the coronavirus, with 1,737 casualties and 23,400 recoveries.