In Switzerland and Liechtenstein, a diverse ecosystem has developed in recent years around investments in crypto assets. This has also grown steadily in the last twelve months and has become more diverse. The Zug and Zurich regions are home to the largest number of companies. The latest "Crypto Assets Study" by Lucerne University of Applied Sciences and Arts provides an up-to-date overview.
Between July 2023 and June 2024, the prices and market capitalization of Bitcoin and other crypto assets increased significantly. The Swiss and Liechtenstein ecosystem for corresponding investments has also grown - both in terms of providers and products. At the end of June, the two countries counted a total of 359 companies offering products and services related to investments in crypto assets. Crypto Valley is concentrated in Zug and Zurich - with significant offshoots in Liechtenstein, Geneva, Ticino and Vaud (see Figure 1).
Private clients in particular seem to use crypto assets
Crypto assets are developing as a supplement or, in some cases, as an alternative in the financial system. What was initially an insider tip for blockchain enthusiasts is now gaining wider acceptance - around 10 percent of the Swiss population already owned such assets in 2022. It is striking that private clients seem to be investing in crypto assets more often than institutional investors, which is rather unusual when it comes to financial innovations.
Diverse crypto assets ecosystem in Switzerland and Liechtenstein
Many crypto companies focus on corporate and institutional clients. Accordingly, B2B business models are important for the crypto assets ecosystem in Switzerland and Liechtenstein. The offering is diverse - with a focus on centralized investment services for direct and indirect investments. Companies that offer services for blockchain-based, decentralized solutions primarily rely on self-custody solutions (so-called ’crypto wallets’). Almost 90 percent of the companies surveyed are not limited to national markets, but also operate internationally.
Rising trends in trading volumes
In the first half of 2024, trading volumes for indirect crypto products on the traditional Swiss exchanges saw an upward trend again after stagnating at a relatively low level in 2022 and 2023 (see Figure 2). A total of around CHF 2 billion was traded during this period. At the same time, trading volumes from Switzerland for direct investments in crypto assets via crypto exchanges also increased.
Diverse opportunities and risks of crypto assets
On the one hand, market risks are reflected in the highly volatile prices. On the other hand, there are additional operational risks as well as liquidity and credit risks along the entire value chain. These vary depending on the type of investment. In other words, whether investments are made directly or indirectly in crypto assets, and whether this is done decentrally via the blockchain (’Decentralized Finance’, or ’DeFi’ for short) or via a centralized provider. A newly developed classification method divides crypto assets into three main categories: firstly, the design of the token, which determines how a crypto asset is technically structured. Secondly, the characteristics of the underlying blockchain system on which the asset is based. And thirdly, the dynamic aspects of how the crypto asset is used in the market. Market participants can thus evaluate the characteristics of crypto assets in a structured manner and act in accordance with their preferences.
What are crypto assets?
Crypto assets are digital representations such as claims, values or rights that are issued on a decentralized register (such as a blockchain protocol) in the form of tokens.
Crypto Assets Study 2024
The Lucerne University of Applied Sciences and Arts is publishing its fourth annual ’Crypto Assets Study’. This provides a comprehensive overview of the investment ecosystem for crypto assets in Switzerland and Liechtenstein. The study was made possible thanks to the support of e.foresight, Finnova, Inventx, the Canton of Zug, SIX, Swiss Bankers Prepaid Services and Zürcher Kantonalbank.
Zug as a global center for blockchain technology
The Canton of Zug is contributing a total of 39.35 million Swiss francs to the development costs of the ’Blockchain Zug - Joint Research Initiative’ between 2024 and 2029. This will be jointly funded by the Lucerne University of Applied Sciences and Arts and the University of Lucerne. Crypto Valley will thus become an international center for blockchain research.
