There’s a new trend emerging where companies related to cryptocurrency sectors are packing up and heading to the city of Zug in Switzerland, which is rapidly emerging as a sort of tech hub to rival Palo Alto and surrounding areas of California lovingly known as ‘Silicon Valley.’
Case in point – an article today talking about how a crypto cold storage and wallet company called Xapo is relocating from Hong Kong, citing business benefits in the Swiss location.
“It was once thought that Hong Kong was the holy grail of crypto regulations. But it has become more opaque,” said Xapo President Ted Rogers of the move, according to Aditya Worah’s coverage at Cryptoground today. “It’s a reality of this industry that you have to be agile and react to regulatory changes all the time. Swiss regulators are smart, interested and sophisticated in dealing with the financial markets … Nothing has changed my belief that Switzerland is the right place for a blockchain or crypto project.”
We’re definitely noticing part of a greater trend – we recently wrote about Bitcoin Ventures, a Bitcoin ATM company, moving to Zug here.
Analysts are also paying attention to the popularity of this Swiss canton’s corporate tax rates and other benefits for doing business locally.
A Business Insider story from last summer takes readers on a tour of Zug, with its luxury car dealerships and scenic vistas, showing how very new business is taking place in this very old town.
“The town itself is very small and largely centred around one road that stretches from the business district in the north to the old town in the south,” wrote Oscar Williams-Grut last summer. “People have been living in the area since 600 AD, although none of the buildings in the old town are that old.”
If you’re investing in cryptocurrency, it’s worth looking at whether your chosen companies and coins are investing in a presence in this Swiss city – because like Silicon Valley, tech innovation often coalesces around a given community. That’s partially due to networking benefits, and the business incentives noted above – but in another way, it’s simply herd mentality, or, if you prefer, “co-branding” – companies want to be associated with the cutting edge, and this is one way to do that.
When traders know the context of their investments, they’re better off. Watch how crypto companies position themselves for success and competition in a growing sector.