The crypto market is no stranger to pump and dump schemes for various tokens and coins. This year has also seen a large rise and fall in crypto and blockchain companies and associated jobs as well.
Sky News has analyzed recent data from Companies House and OpenCorporates to find that at least 340 UK companies in the cryptocurrency and blockchain space have been broken up or liquidated this year. The previous year has found only 139 companies disbanded. This two and a half times increase in dissolution of companies can likely be explained by the vanishing capital from the bear market.
More than 60 percent of the companies have ceased operations between June and November of 2018 as the Bitcoin market has toppled from $128 billion to $66 billion in market capitalization. It appears the decline in companies correlates with the decline in price.
In the same way, many people hopped on the bandwagon and invested in crypto near its peak, it would appear that crypto and blockchain companies similarly attempted to capitalize on an expanding market with excessive hype.
The rush for profit drew in many people who didn’t fully understand the nature of crypto and sought only gains. Now that the money has evaporated, and a large number of people who didn’t know what they were getting into are cutting losses and closing up shop.
Even large enterprises such as mining giant Bitmain is cutting its workforce by half. A recent layoff of 23 people and closing of its Israeli development center in mid-December cites the bear market as the culprit.
The market weeds out the unworthy, and we are seeing it now just like the dot-com bubble saw many companies bankrupt after it burst.
As a whole, this should be good for the growth of the cryptocurrency and blockchain space. Many of the fraudulent companies and scams are being driven out of existence as Bitcoin becomes “boring.”
We have seen the buzzword blockchain thrown around in many cases that are not even relevant to the industry. The Long Island Iced Tea company stock soared a whopping 289 percent when it renamed itself Long Blockchain. The company didn’t change its product from iced drinks, but simply adopted a new name and watched the money flood in.
Many ICOs which have yet to be determined legal investment offerings by the U.S Securities and Exchange Commission have seen their profits plummet and have produced nothing of interest in months. It is for the better of the industry that those who produce value remain while those who tarnish its name fall by the wayside.
As many crypto veterans are aware, the real work is done in the bear market as focus is on producing content and products rather than marketing and bringing in hordes of cash. While everyone grows bored with price action, innovators are producing the fuel for the next bull run and technological implementations.
Still, the crypto job market remains hot in comparison to others. A LinkedIn study has shown blockchain developers are in high demand this year, making cryptocurrencies and blockchain one of the fastest-growing job markets in the United States. Room for growth exists even now, and the crypto pioneers continue to make the way for the future.