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Blockchain has growth potential for generations to come – swisspartners – The art of finance

Blockchain has growth potential for generations to come

Opinion piece by Mathias Ruch

In 1989, the internet as we now know it was invented at the prestigious CERN Institute in Geneva. However, Switzerland itself has little to show for this historic development, as not a single Swiss or even European internet company of any global significance has evolved as a result of this opportunity. As we all know, the big business went to tech giants from the US and China.

But Switzerland is now returning to the fore as the epicentre of a technology that has the potential to generate growth over several generations: blockchain. The potential offered by this new technology is being hailed as similar to that harboured by the internet 30 years ago. After the phase of information sharing in the 1990s and commercialisation in the form of e-commerce and the dotcom boom, blockchain technology has become the facility for the internet of value – or in other words the secure exchange of assets.

Blockchain technology and its close affiliate, Crypto Valley, which is the collective name for the Swiss blockchain ecosys¬tem comprising almost 1,000 companies and more than 5,000 staff, represents not only the biggest opportunity of my entrepreneurial life, but also a historic opportunity for Switzerland.

What motivated us as our guiding principle when we founded CV VC three years ago is becoming ever more apparent: the areas in which blockchain will be used will extend far and wide beyond cryptocurrencies. Every market that involves the digital transfer of assets and shares information on ownership will use this technology. Blockchain is already attracting huge interest, which will continue to rise at a rapid pace. In line with the famous saying from André Kostolany – “in a gold rush, don’t invest in the gold diggers, but in shovels” – we have answered the question of what comes after bitcoin by creating an investment approach to meet the growing demand for alternative and digital assets.

We are on the verge of a blockchain revolution

Technologies such as artificial intelligence (AI), the internet of things (IoT) or blockchain are precisely the ones that are attracting new generations of founders and could trigger the next tech revolution. Cryptocurrencies have spearheaded this revolution and made it ubiquitous due to the explosion in bitcoin prices. However, they are just one of many possible applications for blockchain technology. There is far greater potential to be tapped in the use of this technology across all sectors of the economy – from the protection of logistics chains in the global transportation indus¬try, to cross-border data exchange in pharmaceuticals research and the transfer of digital assets in the finance sector. I firmly believe that we are on the verge of a blockchain revolution.

 

“Blockchain technology is not just the biggest opportunity of my entrepreneurial life – it is also a historic opportunity for
Switzerland.”

The surge in digitalisation as a result of the coronavirus pandemic has led to disproportionately high growth in tech-driven markets and applications. Our venture capital investment approach and the start-up portfolio of CV VC, in which investors can participate via our investment certificate, are defined by six core areas relating to the theme of technology for tomorrow (T4T): future of work, lifestyle & health, education & science, security & identity, e-commerce & logistics and – the issue that is most relevant to swisspartners’ activities – finance & inves¬ting. This trend goes hand in hand with the new blockchain legislation that was recently passed in Switzerland, which will be the most advanced of its kind in the world when it comes into force this summer. In this setting, given the fast-growing sector of alternative investments and the fact that traditional asset classes are generating ever-decreasing returns, institutional investors are making the move towards a private equity approach that involves riskier investments in assets over a longer period, such as venture capital in the technology sector. There is a huge amount going on in the field of digital assets at the moment with many innovative topics that we have yet to explore. It is not too late to get involved – on the contrary, we are just at the beginning of this new phenomenon.

About Mathias Ruch

Mathias Ruch is the founder and CEO of CV VC, an early-stage venture capital investor based in Zug. The company focuses on investments in blockchain-based start-ups. As a co-founder of the Swiss Blockchain Federation, he is actively involved in promoting the appeal of Switzerland as a location for blockchain-based activities and supporting the development of a secure and competitive legal framework. Mr Ruch lives with his family in Zurich.

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