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What happened at the price of the bitcoin in 2018 can be summarized in one word: crash. The collapse of 73% of the price in the last year was the worst in the ten-year history of the digital currency, which was offered for the first time January 3, 2009, exactly 10 years ago, by Satoshi Nakamoto, its founder little known.
Bitcoin ended 2018 with an average price of $ 3,740, compared to $ 14,150 at the end of 2017, according to data from the CoinMarketCap website.
Bitcoin is not the only one. The digital currency market, consisting of over 2,000 types of currencies, had its worst year in 2018, with a total of $ 700 billion canceled, leaving it with a total value of 85% lower than the January 2018 peak. The upheaval of the market has been felt not only by millions of investors all over the world, but also by the numerous blockchain companies that have arisen in recent years. Many of these companies had to reduce staff and activities at the end of the year, with some that have closed completely.
Hogeg fires Stox employees in Israel
Blockchain companies operating in Israel have had a difficult year. Bitcoin, the Chinese mining giant Bitmain, closed its operations in Israel in December and fired all 23 employees into its Anana development center, including VP Gadi Glikberg. Another company to close last year was Stox, controlled by Moshe Hogeg, founder of the investment company Singulariteam and owner of the Beitar Jerusalem football team.
The largest startup blockhouse in Hogeg, Sirin Labs, has 60 employees; sources said the company has made redundancies at the end of the year. In December, Sirin Labs launched Finney's blockchain phone. Hogeg told the Bloomberg website that, after the distributors ordered 160,000 phones from the company, the company had sufficient capital to operate for another 12 months. Market estimates say that over 20 blockchain Israeli startups have closed in 2018, with more projected shutdowns for 2019. By comparison, a total of 550 Israeli startups were closed in 2018, as reported recently in "Globes".
In addition to Sirin Labs, Israel's largest blockchain companies are now the first group, founded by Yariv Gilat, which has 65 employees, including 60 in Israel; Colu, controlled by Amos Meiri, David Ring and Mark Smargon, with 62 employees; Spheres, controlled by Tal Kol and Uriel and Daniel Peled (60 employees); and Bancor Network, controlled by Eyal Hertzog and brother and sister Guy and Galia Benartzi (55 employees).
Although most of the blockchain companies operating in Israel have mostly Israeli founders, managers and employees, many of them are incorporated into foreign countries, mainly for tax and regulatory reasons. On the other hand, there are also blockchain companies incorporated in Israel even though their owners and managers are not Israeli, like Bitfarms (TASE: BLLCF), a Canadian bitcoin mining company. Bitfarm's share price fell 95% to the Tel Aviv Stock Exchange (TASE) in 2018.
eToro wants to expand in the United States
An indicator of the state of the industry is the number of companies operating in it and the number of employees. How many Israeli blockchain companies are operating now? This is a tough question. First of all, there are companies whose business is not limited to the blockchain, such as eToro, controlled by David Ring and the brothers Yoni and Ronen Assia, even though most of their business is linked to digital currencies.
eToro, which operates a social investment platform, currently has 600 employees, including 350 in Israel. The company claims that 100 of its employees are directly involved in the blockchain. As reported in "Globes", the company completed a $ 100 million loan round in March 2018, intended to expand into new markets, research and develop blockchain and digitize its businesses. This year the company expanded its operations in the United States, where it founded an electronic trading platform for digital currencies and launched a digital portfolio for cryptocurrency owners outside the United States.
It should be noted that most blockchain companies are fairly young start-ups founded in the last two or three years. In general, in most cases, startups do not report when they close, and their official arrest usually comes long after all their employees have been fired.
Moreover, no public or government entity has a list of Israeli blockchain companies, among other things because many of them are not registered as companies in Israel. The figures are therefore mainly based on the relationships of the companies themselves and on the relationships of the organizations operating in the sector. It is reasonable to assume that these figures are incomplete.
How many startups were closed in 2018?
At the same time, to try to get a general picture of the activity in the local blockchain sector, "Globes" has recently made inquiries with various entities in the sector. According to the figures collected for "Globes" by the Israel Bitcoin Association, chaired by President Meni Rosenfeld, and by the company Andromeda, led by CEO Tal Benno Sklar, which places employees in the blockchain sector, at the end there were 113 blockchain companies of 2018, compared to only 53 at the end of 2017. If we take into account that several local companies have closed in 2018, it emerges that over 50 blockchain companies were founded in Israel in the last year, which means that the number of companies has doubled during the year.
At the same time, there are other figures that give a different image in the Israeli blockchain community. The Israeli association Blockchain, founded in November and led by founding members Gadi Isaev and Roman Gold, reports that in December 2018 there were 223 active blockchain Israeli startups, compared to 68 startups at the end of 2017. According to these figures, 22 Israeli blockchains, startups closed in 2018, The Blockchain Association estimates the number of employees in the sector in Israel to 3,000: 2,000 in startups and 1,000 in large companies.
There are still other figures for blockchain activity in Israel, however. According to One Alpha, the research company of the First Group, in the last seven years, 148 blockchain companies have been founded in Israel, 21 of which are no longer active. According to these data, at the end of the third quarter of 2018 there were 127 active blockchain Israeli companies. One Alpha's Yaniv Feldman told "Globes" that the company was still looking at data for the fourth quarter of 2018, when more companies closed down, while some new ones were added.
Record year for ICO
Although Israeli startups have achieved international successes in many sectors, both in successful outlets and in large technology companies, this has not yet occurred in the blockchain sector. At the same time, local blockchain initiatives have raised over $ 1 billion in the last year – a considerable amount compared to other start-ups.
"An opportunity to clean up the cryptocurrency market"
The Israel Blockchain Forum was founded in March 2018 in order to unite Israeli companies in the sector and represent them to decision makers. The founders of the Blockchain Forum include Roy Saar and Oron Snir of Mangrov Capital Partners, the angel investor Ofer Rotem and entrepreneurs Yoni Assia of eToro, Ido Sadeh of Saga Foundation, Sebastian Stupurac of Wings.ai, Maya Zehavi of Ontici and Liraz Siri of Tabookey.
Blockchain CEO Igal Nevo claims that the Forum does not have complete data on the number of companies and their employees. "To summarize 2018, we can say that Israel has initiated a welcome process of in-depth study of the field, but this process is not fast enough and the same fundamental problems that have characterized the year, the most important of which is the 39. Inability to manage financial activity, will also accompany us in 2019 ", says Nevo. "The number of registered companies is not an accurate indication of real activity, because if they can not open an account on a bank account in Israel, Israeli companies can not operate in the local market. in the cryptocurrency market it is an opportunity to clean up the market and collaborate with the regulator to create certainties, such as those existing in all other high-tech sectors ".
Rosenfeld also commented on the data gathered in the survey, saying: "If we look at the general trend, we are moving towards the top, it is true that we have slightly decreased compared to the peak at the end of 2017, but the multi-year trend is unmistakable, we are seeing more businesses, more companies, more business and more employees The wave of ICO that has overwhelmed us has generated awareness of the great innovations in the industry, but has also created anxiety, because many people have searched and burned in investments in unsuccessful companies or scams disguised as digital currencies, as happened with the mania of applications several years ago, but anyone who wanders can now tell straw grain, which is already strengthening the market ".
Published by Globes, Israeli economic news – it.globes.co.il – January 3, 2019
© Copyright of Globes Publisher Itonut (1983) Ltd. 2019
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