Bitcoin’s Bad Rep: Over 340 Crypto and Blockchain Companies Dissolved this Year
The crypto world appears to be sobering up from a year-long hangover according to recent research by Sky News. At least 340 registered companies in the United Kingdom with ties to blockchain or cryptocurrency went bust in the last year, after launching at the height of the crypto boom.
Now, not only is the gold-rush over, but of the crypto firms that didn’t throw in the towel, many have chosen to remove the words crypto and blockchain from their company names – such is the extent of the turning tide.
Crypto Companies Fold
According to research from Sky News, the 2017-2018 business year proved to be a short one for crypto-focused firms. From the piece:
“…at least 340 companies related to cryptocurrencies or blockchain were dissolved or liquidated this year, compared to 139 in the previous year. More than 200 of those companies were incorporated with Companies House during 2017, when the value of Bitcoin surged 1,500% through to its peak in December.”
Most of those liquidations (60%) came between June and November, and were likely triggered by BTC’s fall to the high $5,000 range towards the end of June. And in a very rare sight indeed, the number of companies being dissolved is now out-pacing the number being registered in the blockchain space, at least in the U.K.
As a perfect example of the stark change of direction in terms of crypto’s reputation: just last year the Long Island Iced Tea company changed its name to Long Blockchain, and its stock rose by close to 300%.
But now, according to Sky, companies are running from the names crypto and blockchain as quickly as they can:
“Of the businesses which haven’t been dissolved, Sky News has found more than 50 which have changed their names to no-longer reference Bitcoin, blockchain, or cryptocurrencies.
The chief executive of one business said this was because opening a bank account with one of those words in the company name proved a nightmare – although Sky News identified hundreds of other businesses with similar titles.”
Is it really any surprise that opportunists who entered the crypto space when the price was high would leave when the price was low? It’s worth bearing in mind that many of these companies were never really going to have a lasting effect on the crypto space. Any company that needs BTC to be trading high just to exist isn’t running on a very efficient business model.
Despite the turning of public opinion on BTC and the crypto space in general, Bitcoin is still trading at a price higher than it was for nine out of its ten year history. Ironically, now would be the best time for companies to make their move. But they’ll probably wait until it’s too late again.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.