📅 Field note from: January 2019 | Last updated: May 2026 Originally written at the depth of the 2018-2019 crypto winter from inside Zug; updated with seven years of post-recovery perspective in May 2026.
January 2019. Bitcoin was trading around $3,500 — down 82% from its December 2017 peak. The Bahnhofstrasse in Zug was as quiet as it always is in winter, which is to say: very quiet. A few crypto-branded hoodies visible in the coffee shop near the station. Fewer than there had been a year earlier.
That’s what I want to document here: not the price chart (you’ve seen it), but what the winter actually felt like from inside the town that had spent two years calling itself the world’s crypto capital. What closed. What survived. And why one piece of news in August 2019 mattered more than any token recovery.
How Deep Was the Drop — From Where We Were Standing
Putting numbers to the winter: the CV VC Top 50 Report, which tracks the 50 largest blockchain companies headquartered in Switzerland and Liechtenstein by market cap, recorded a combined valuation drop from $44 billion to $20 billion between mid-2018 and end-2018 — a 55% decline in six months.
Those numbers felt abstract from street level. What felt concrete was this: Swiss banks, already cautious about crypto business accounts throughout 2017, pulled back further. Several teams I knew were spending three to four hours a week on basic banking administration — searching for accounts that wouldn’t get suddenly closed, fielding questions from compliance departments that had no established playbook for “blockchain company” as a client category.
The ICO market, which had funded the 2017 wave, essentially stopped. ICO volume in Switzerland fell from 184 deals in 2018 to 94 in 2019. Projects that had raised money in ETH watched their treasury compress as ETH fell from $1,396 to $86.54 — a 93.8% decline. If you had raised $10 million USD equivalent in ETH in July 2018, you had roughly $620,000 by December.
That is not a paper loss. That is an operational runway problem.
The Quiet Exits: Projects That Did Not Survive the Winter
The most memorable failure was not quiet. Envion AG, a Zug-registered company, had raised approximately $91 million from over 37,000 investors in a 2017 ICO for mobile crypto mining powered by renewable energy. By July 2018, FINMA had opened enforcement proceedings. By November 2018, the Cantonal Court of Zug opened bankruptcy proceedings. By March 2019, FINMA formally declared the ICO illegal — Envion had accepted public deposits without a banking licence.
Thirty-seven thousand investors. $91 million. Zug address on the letterhead.
Swiss Real Coin, a project promising to tokenize Swiss real estate, was also active in the ecosystem during the boom and dissolved during the winter — insufficient investor protections and regulatory obstacles ended it without the drama of a FINMA enforcement action, but the outcome was the same.
These were not isolated cases. Across the wider ecosystem, smaller teams — projects that had raised between $2 million and $15 million in ICOs, had rented Zug office space, and had begun hiring — quietly wound down. Some relocated to less expensive cities. Some simply closed. The CV VC data showed 750 companies in Crypto Valley by end-2018, up from 629 mid-year — the number kept growing even as individual projects failed, because new entrants kept arriving, but the churn underneath the headline number was real.
The Firms That Stayed — and Why
What is notable about 2019, in retrospect, is how many substantial operations did not leave.
The Ethereum Foundation maintained its Zug presence. Ethereum’s market cap was a fraction of its peak — but the Foundation was not an ICO startup with a treasury problem. It had structured itself deliberately for a long time horizon, and Zug’s legal and regulatory environment remained one of the few places where a non-profit foundation controlling a large crypto asset pool had a coherent legal framework.
The Cardano Foundation, headquartered in Zug since 2016, stayed. Tezos Foundation stayed — despite the very public governance dispute between the Foundation’s board and the Breitmans that had dominated 2018 headlines. Tezos was a cautionary tale about foundation governance (see the ICO boom field note for the backstory), but the Foundation itself remained operational in Zug throughout the winter.
The firms that stayed shared a common feature: they were either well-capitalised enough to weather the drawdown, or they were infrastructure-layer projects whose value proposition did not depend on token price. A smart contract platform is not less useful when ETH is at $90.
CV Labs, which opened on Dammstrasse 16 in 2018 — right at the start of the winter — continued operating. The co-working space and incubator was quieter than it would become, but it was open. The CV Labs field note covers what the space looked like in later years; in early 2019, the hallways were less crowded, the coffee mornings smaller, but the doors were open.
The Morale Reading: January 2019
I want to be honest about what the ecosystem felt like in January 2019, rather than retrofitting the story with the confidence that hindsight provides.
The prevailing mood was not panic. It was something closer to exhausted pragmatism. Teams that had survived the year were the ones that had already cut their burn rates, figured out banking, and focused on building product rather than token price. The people who had come for the ICO wave and stayed because they actually believed in the technology were still there. The people who had come for the ICO wave and needed a quick return were mostly gone.
There was also genuine uncertainty about what the regulatory environment would look like. FINMA had issued its ICO guidelines in February 2018 — a useful framework, but not a complete picture of where Switzerland stood on crypto banking, securities, or custody. Without that clarity, institutional money stayed away. The Swiss banking sector’s reluctance to serve crypto businesses was not ideological; it was a compliance gap that nobody had yet formally closed.
One thing I remember clearly: conversations about building for the long term felt different in January 2019 than they had in January 2018. Less abstract. More necessary.
The Licensing Signal: Why August 2019 Mattered
On August 26, 2019, FINMA granted banking and securities dealer licences to SEBA Bank (Zug) and Sygnum (Zurich). These were the first banking licences ever issued to pure-play crypto firms by a reputed financial authority.
I am covering this briefly here because the full field report on that day is in the R04 piece. But from the perspective of what the crypto winter felt like and when it started to feel like it might end: this was the moment.
The licences did not immediately solve the banking access problem for every crypto team in Zug. SEBA and Sygnum were targeting institutional clients, not small startups. But the signal they sent was structural: Swiss regulators had decided that crypto belonged inside the formal financial system, not outside it. That decision had been building for years through FINMA’s regulatory work — but it became legible to the rest of the world on August 26.
By the end of 2019, the CV VC Top 50 had recovered from $20 billion to approximately $40 billion in combined market cap. Employee count across the ecosystem grew. New companies continued to register in Zug at a pace that surprised some observers — the number that expected a full-scale exodus.
The exodus did not happen. Which, from a January 2019 vantage point, was not obvious at all.
What the Winter Actually Tested
Seven years later, the pattern from 2018-2019 looks clearer than it did in the middle of it.
The crypto winter was a filter. Projects that had raised money primarily to benefit from the ICO boom, without a product users actually needed, did not survive. Projects built on infrastructure that the industry needed regardless of token price — protocol development, custody infrastructure, regulatory engagement — stayed and, in most cases, grew.
Zug’s specific advantages — Swiss foundation law, FINMA’s willingness to engage with the industry rather than ban it, proximity to Zurich’s financial infrastructure — mattered more during the winter than during the boom. During the boom, almost any jurisdiction looked attractive. During the winter, the jurisdictions with legal clarity and regulatory credibility pulled ahead.
The CVA data from early 2019 showed roughly 750 companies still active in Switzerland and Liechtenstein. That number would reach 842 by end-2019, and continue growing through 2020, 2021, and beyond. The winter did not empty Crypto Valley. It clarified who was there for real.
That is, looking back, what January 2019 turned out to be: not an ending, but a sorting event.
Field note written in January 2019; updated with retrospective data and seven years of post-winter context in May 2026. Primary sources: FINMA enforcement records, CV VC Top 50 Reports (Q4 2018, H2 2019), SWI swissinfo.ch reporting, and direct ecosystem observation.