Over 340 companies with ties to Bitcoin and Blockchain have reportedly been dissolved over the course of this year, as a result of the bearish crypto market that plummeted to record lows in November. The companies in question are all based out of the United Kingdom and were looking to ride the wave of optimism that was generated by the soaring prices of cryptocurrencies last year.
2018 has not been a good year for Bitcoin, or other cryptocurrencies for that matter. Almost a year ago from now, Bitcoin (BTC) was priced at around US$ 20,000, which has since plummeted to $3,900 in December 2018. With the crypto boom officially over, the surviving companies that haven’t been forced to shut down or get absorbed have taken other measures, including removing the words crypto and Blockchain from their company names.
Sky News has recently published research that reflects the companies taking a hit from the falling prices. the report says,
“…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.”
As reported, most of these dissolutions came within the June-November period when the price of Bitcoin fell to a comparatively high $5,000 ballpark. Surprisingly enough, the number of companies going bust is now higher than the number of new companies registering in the Blockchain space in the UK.
In a perfect example of how stocks and investments drive most of the companies in question, the Long Island Iced Tea company changed its name to Long Blockchain in 2017 and its share prices rose by 300%. Now, however the tables have turned and Bitcoin’s bad reputation generated by the falling prices has sent companies running from the same words that drove up profits last year.
“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.”
It isn’t surprising that companies and entrepreneurs looking to cash in on the hype last year are being forced to shut down as soon as the bubble has burst, and quite possibly, the surge in businesses was what acted as a catalyst. Most big companies that were there from the start, however, are still running strong – Coinbase being the best example.
The reputation for BTC is still in shambles, though, and it is quite possible that onlookers will be sceptical of digital currencies for years to come.
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