The meteoric rise of cryptocurrency prices in 2017 led to an influx of new entrepreneurs, some of whom, unfortunately, were scammers. A number wanted to take advantage of inexperienced crypto investors through shilling ICO tokens, despite not having a real product in many cases or even a viable business plan. Others tried to con stock investors by adding the term “blockchain” to their companies’ names or claiming to use “DLT” for every unrelated business under the sun, just to ride the hypeall the way to the bank. As these trends subsided, many startups went belly up.
Putting a number on it, the U.K.’s Sky News has found out that at least 340 companies claiming to be involved with crypto or blockchain were shut down this year. It obtained these findings by analyzing publicly available figures from the databases of Companies House and Open Corporates. This figure is an increase of 144 percent from just 139 blockchain-related companies that went bust in 2017. The data shows that over 200 of those companies were established during 2017 and 60 percent of them closed down between June and November 2018 alone.
On the other side, the number of newly-registered blockchain companies continued to raise throughout the year, reaching a total of 817 in November 2018, which means the market continued to grow overall. However, the report notes that the number of new companies is now growing slower than the number of blockchain businesses shutting down for the first time. And of the companies which haven’t been shut down, over 50 have removed references to blockchain or crypto from their name.
Instead of trying to explain exactly what happened in the vast and varied ecosystem of blockchain business, Sky News has simply tried to blame it all on Bitcoin. The report simply points to the price decline of BTC and links it directly to the figures which they have found. To further dramatize the issue, the authors claim that hundreds of bitcoin investors in the U.K. have been hurt, causing them to lose their homes and even marriages, but fail to present a single concrete example. Sky News’ rhetoric is incomparable to mainstream media coverage of the collapse in stock markets around the world, which has seen tech giants Facebook, Amazon, Apple, Netflix and Google (the ‘FAANG’ stocks) lose more than $1 trillion in value.
Categories: Crypto Currency