Desperate times are in store for the Swiss crypto sector. As per a report published by The Swiss Blockchain Federation, 90% of blockchain and cryptocurrency companies in Switzerland can face bankruptcy in the next six months. In case the government does not launch special assistance for these Swiss crypto firms, the risk of business closure is high.
The ongoing COVID-19 pandemic has caused the Swiss Blockchain Federation to issue this dire warning. As entire economies grind to a halt, crypto businesses are no exception. Layoffs, negative returns, and lost productivity will lead to large scale business closures.
Entrepreneurs abandoning the Swiss Crypto Valley
Countries are on the brink of recession due to Coronavirus lockdowns. Global corporations, institutional investors, large-scale industries are now vulnerable to bankruptcy. In these times, emerging economic sectors like cryptocurrency and blockchain are facing mounting stress. As people flock to the safety of essentials, interest in innovation will decline rapidly.
The Swiss Blockchain Federation report outlines the dangers facing the crypto and blockchain industry in the country. Approximately 90 percent of firms operating in the Swiss crypto realm are at risk of going bankrupt. Subsequently, hundreds of crypto jobs will be lost across various Swiss crypto firms.
Swiss crypto firms face funding bottlenecks
The vice president of the Swiss Blockchain Federation, Lorenz Furrer, mentioned how the ‘crypto valley’ could soon be abandoned in case the government doesn’t support the sector. The report features inputs from more than 800 crypto companies operating in Switzerland. Most firms reported that the chances of going bankrupt had increased exponentially due to the COVID-19 lockdown. Survival would be tough in the next six months.
The report mentions that blockchain startups are the most vulnerable category amongst Swiss crypto firms. Switzerland has enacted crypto-friendly policies and has promoted blockchain innovation extensively in the past few years. The country’s blockchain haven status is at risk as funding dries up for new blockchain firms. Swiss crypto entrepreneurship will also be highly vulnerable.
Blockchain programmers and crypto developers are experiencing job insecurity. Depleting revenues and funding cuts will further aggravate the already dire situation.