The latest edition of the CV VC Top 50 Study reveals that companies from the Crypto Valley have gained sustained substance. The number of companies increased to 1,120 and the companies included employed around 6,002 people.
The study, which was produced for the fifth time by investment company Crypto Valley Venture Capital (CV VC) in collaboration with PwC Switzerland and IT partner inacta, provides up-to-date figures on what is currently happening in the Crypto Valley and the broader crypto ecosystem.
- The valuation of the top 50 companies in the Crypto Valley increased by 464% in 2021; from $108.4 billion to $611.8 billion.
- The total number of companies in Crypto Valley is 1,128; an increase of 18%.
- The Crypto Valley (Switzerland and Liechtenstein) saw total employment of blockchain companies rise to 6,002, a significant increase of 16% from the 5,184 employees in the previous year.
- The Crypto Valley now counts 14 Unicorns (i.e., projects with valuations over $1 billion), up from 8 at the end of last year.
Number of companies continues to rise
Both the number of companies and jobs continue to grow at a significant pace. The increase has been fueled by new companies setting up shop in the Crypto Valley, as well as the expansion of the presence of existing players. Both developments are encouraging, according to the report, as they show that the legal environment is very attractive and that qualified employees are available in the market.
The number of companies in the Crypto Valley exceeded 1,000 for the first time, growing to 1,128 at the end of December 2021. This is an increase of 18% compared to the previous year. Growth was driven across the board, i.e. establishment of new protocols, subsidiaries of major financial players, and in other sectors that benefit from the Crypto Valley's advantages. The employment numbers of the top 50 companies in The Crypto Valley also grew significantly. Overall, the number of employees in Crypto Valley grew to over 6,000 at the end of 2022, a 16% increase from December 2021.
Valuations skyrocket
In 2021, the Crypto Valley saw a dramatic increase in valuations and strong fundraising activity for new protocols. In addition, the fundraising trend in the financial sector continued (Sygnum Bank, SEBA Bank) and there was the first acquisition of an early adopter (Crypto Finance AG) by a large traditional company and the first acquisition of a protocol by another protocol (Polygon Hermez).
Overall, there has been a dramatic increase in valuations for protocols. The Crypto Valley Top 50 companies are now valued at $611.8 billion, an increase of 464% year-over-year. Ethereum continues to make up a large portion of this with a valuation of $438.1 billion. Due to regulatory clarity in Switzerland and Liechtenstein, several firms established a presence, including Binance, Bitmex, Fireblocks, Copper, and others. According to the report, more firms from the financial services sector are expected to establish branches in the in Switzerland, in addition to the strong base for protocols.
Regulatory environment improves
The Swiss Parliament has approved the new Blockchain and Distributed Ledger Technology (DLT) framework. With this, Switzerland has taken another step to remain an important location for FinTech, Blockchain as well as DLT technologies and corresponding projects. The new framework has been rolled out gradually since the beginning of 2021.
This new DLT framework provides advanced regulatory solutions and specific changes in key areas, namely civil law, insolvency law, and financial market law, as well as anti-money laundering regulations and private international law. These changes bring more legal certainty, remove barriers related to blockchain applications, and reduce the risk of abuse in the industry. According to the report's authors, the following sectors will benefit the most from the new framework:
- (Security) Token exchanges: introducing a new license type for trading venues focused on digital assets (DLT trading facilities).
- Custodial service providers: clearer and simpler rules for digital asset custodial service providers.
- Security token issuers: introduction of a civil law concept for digital securities ("asset tokens") that enables the creation and trading of digital securities in a DLT ecosystem without legal uncertainties.
