The coronavirus pandemic has been affecting more and more aspects of the blockchain and cryptocurrency market. As Cointelegraph previously reported, more than half of the 2020 crypto conferences were either canceled or postponed due to the COVID-19 outbreak, while mining manufacturers had to stop the equipment production in China.
At the same time, other companies have been able to master new opportunities by digitizing business processes and moving employees online. Cointelegraph has analyzed how severe the consequences appeared to be for projects working with blockchain technology and cryptocurrencies, and how the coronavirus pandemic has affected their roadmaps and release schedules.
The latest news related to digital initiatives shows that, in most cases, the extent of changes within the project directly correlates with the degree of spread of the coronavirus in a specific country.
For example, China, which reportedly halted the spread of the pandemic on its territory, announced that it will launch its national blockchain network in April of 2020, as it was initially scheduled. Chinese mining companies have resumed their work after the recent closure of their offices and facilities.
Meanwhile, Russia, which is facing rapid growth in the number of COVID-19 cases, has postponed the adoption of a law on cryptocurrencies indefinitely. Earlier, Cointelegraph also reported that the Russian government halved the budget for the development of blockchain technologies. The city of New York, which is experiencing an extreme number of confirmed coronavirus cases, has seen almost all local blockchain companies, including Cointelegraph, close their offices.
Other projects have temporarily suspended their activities related to doing business in other countries. For example, Prime Trust, a company that provides open banking solutions in the blockchain industry, said that its representatives cannot visit their recently opened offices in Cyprus, which has resulted in slowdowns and delays with everyone working remotely.
The situation with new releases
It seems that the roadmaps from the top 20 crypto projects in terms of capitalization have been unaffected by the coronavirus. This can be explained by the fact that the launch of the main critical updates planned for 2020 is carried out by the blockchain, not by people, and the employees involved are used to working in a decentralized way.
Moreover, the automation of processes has allowed Bitcoin Cash (BCH) and Steemit (STEEM) to successfully fork, while Tether (USDT) has launched its stablecoin on the Bitcoin Cash network. The pandemic appears not to have affected the date of the much-anticipated Bitcoin halving event either unless miners around the world turn off their equipment all at once.
The development of Cardano’s (ADA) blockchain platform is also going as planned despite the COVID-19 pandemic, as Cordano Founder Charles Hoskinson noted during a YouTube Livestream held on March 13. Furthermore, the developers reassured the investors and users that the project has been making substantial progress on the upcoming network update called Shelley — with a number of bugs reported by testnet users having significantly decreased during the past few weeks.
In an interview with Cointelegraph, Paul DiMarzio, the director of community at Enterprise Ethereum Alliance, explained that the company’s groups carry on with their work, although the alliance had to make adjustments to its roadmap:
“For Synchronize and Consensus we rolled our sponsorship over to 2021, Blockchain Revolution Global is now to be in the fall. We’ve put any thought of conferences on hold for now until life starts to restabilize.”
Firms cut budgets and staff
For many blockchain companies, this is an extreme measure taken to minimize the economic consequences caused by the COVID-19 outbreak. Large blockchain analytics firms Elliptic, Chainalysis and CipherTrace reported that they have already cut either their workforce or budgets or plan to do this in the near future. In particular, Elliptic has cut 30% of its staff in the United States and the United Kingdom; CipherTrace has reduced the workforce in its sales and marketing departments; and Chainalysis has announced its plans to cut employees’ salaries by 10%.
In April, digital asset custody agency Trustology laid off seven employees, as the company’s key clients — large banks and institutional players — have been taking longer than expected to leap into the crypto house.
Marketing is another article of expenditures that companies working with crypto and blockchain technology have been cutting by canceling offline conferences and other events. In particular, AlphaWallet developers have tokenized the tickets for the EDCON 2020 Ethereum conference. However, due to the event’s cancellation, the blockchain tickets they worked on are not needed anymore. The company’s CEO, Victor Zhang, shared with Cointelegraph that it cost the team about 40 hours of development time.
Carlos Domingo, the CEO and co-founder of Securitize, a blockchain-based security tokenization firm, told Cointelegraph that while the company hasn’t laid off any staff, it has cut back its marketing budget.
Another blockchain project — Telos Foundation — has also had its budgets affected by the recent lockdown and market volatility. Justin Giudici, the head of product at Telos, explained to Cointelegraph that in order to cope with the negative consequences, the project team has changed its focus to initiatives with a shorter time frame for impact. Meanwhile, according to Giudici, the company hasn’t fired any employee while seeing a rise in staff’s working time instead:
“Some participants have unfortunately lost their day job freeing them up to contribute even more to Telos. Many of these contributors have savings and are fortunately happy to work for TLOS or even for free out of passion and belief in the project.”
Other projects have been moving expenses from marketing to other areas to better manage their budgets. Thus, HedgeTrade, a prediction platform that allows users to make predictions on live sporting events, postponed its launch due to the cancelations of sports events worldwide. David Waslen, the CEO and co-founder of HedgeTrade, commented on the issue: “As a result, we’ll shift some of that marketing and development focus toward other areas of expansion, such as adding stock predictions and entering in the esports arena.”
Tokensales on hold
The restrictions and economic problems caused by the coronavirus have left many token sales without investments, while forcing others to postpone their launch. The latest report by ICOBench shows that the investments raised by projects over the period of the last week of January to the first week of February are considerably lower, compared with the same period last year.
Many projects have postponed their token offerings indefinitely. Jesse Uzzell, the CEO and founder of Climate Futures, said that the project had to cancel its token sale and DApp launch initially scheduled for March: “We postponed our 1PLANET launch and we have not decided on the new official launch date because of coronavirus crisis and how it dominates the news.”
SWAZM, another blockchain company that had its initial exchange offering scheduled for Q1 2020, reported its postponement. Vali Malinoiu, the company’s CEO and founder, said:
“This forced us to implement work-from-home policies, delayed many partnerships, and put us in a general alerting state.”
Investors are now more focused on conserving their cash and are waiting to see what the business and economic landscape will look like after COVID-19 passes, according to Sukhi Jutla. The token sale of her project, MarketOrders, a blockchain-based marketplace for the gold and diamond jewelry industry, was delayed by three months, as tech development slowed down.
However, there are those who have announced that their token sales were unaffected by the pandemic. For example, on March 5, crypto exchange BTSE reported its IEO as successful, with tokens sold out in four hours, while blockchain project Solana raised $1.76 million, selling out all its tokens via a Dutch auction.
Major cryptocurrency exchanges such as Kraken, Gemini, OKEx and Bitstamp seem to remain unaffected by the coronavirus pandemic, reporting a surge in user sign-ups and trading volumes. Binance’s futures monthly trading report revealed an 85% increase in trading volumes across the exchange’s futures perpetual contracts for January 2020. In February, OKEx exchange launched OKChain on a testnet and its first decentralized finance application, OKEx DEx, followed by the launch of its “Buy Crypto” fiat gateway service for users to convert their fiat into cryptocurrencies in March.
The massive spread of the coronavirus in Asia has not precluded the launch of Huobi Thailand, as reported by Cointelegraph on March 5. Two other major cryptocurrency exchanges — Poloniex and Bitfinex — have not postponed their launches, which are planned for this month — LaunchBase and Staking Rewards Program, respectively.
When it comes to cryptocurrency exchanges working in other regions, the situation appears to be the same. Bithumb Global, for instance, shared with Cointelegraph its plans to release developments as initially intended.
“The coronavirus doesn’t really affect our growth due to most of our activities are primary digital,” the company’s vice president, Vincent Poon, claimed. Sunny Ng, the CMO of Bithumb Global, also added that the company has accelerated the development of diversified trading products.
Ali Beikverdi, the founder and CEO of exchange software provider bitHolla, told Cointelegraph that existing crypto exchanges using the company’s exchange kit software have been racking in record trading volumes. “This is perhaps due to more people being online while they are stuck in quarantine, trying to make living online trading crypto,” Beikverdi added.
However, according to Beikverdi, the growing hesitation from potential exchange operators who want to start an exchange business has made the provider postpone advertising and marketing content and push back new content creation.
How are projects coping with the consequences of COVID-19?
Cointelegraph talked with 18 projects in order to understand how the coronavirus affected the activities of blockchain and crypto companies in terms of numbers. Ten of them reported that the pandemic had no effect on their business processes. They are attributing this to their decentralized approach. For example, Changelly CEO Eric Benz told Cointelegraph that the team is still on course to launch its most important product of this quarter, and operations continue to remain strong, seeing a large increase in usage.
Careful spending is also what helps blockchain projects keep their processes unaffected. The Foundation for Interwallet Operability, a smart token developer, shared with Cointelegraph that wise budget management helped the company launch the FIO Protocol blockchain in late March with the participation of 23 block producers from around the world. Other projects have been adapting with new methods appearing to be efficient in the new reality. Silicon Valley blockchain startup Harmony, for instance, is now experimenting with a “digital whiteboard”:
“Everyone can jump in anytime, comment around our execution in an asynchronous way, while we have continuous windows open if you want to catch up with a colleague. This has also led us to improve the intra-cooperation between our offices and colleagues in Europe and China.”
Garlam Won, the CMO of Harmony, also noted an increasing number of Stake Heist participants before the public launch of Open Staking due to the extended availability of people who are staying home.
In an interview with Cointelegraph, Norbert Goffa, the co-founder and executive manager of ILCoin, explained that despite the cancelation of many events and travel restrictions, the project plans to showcase the technology in the fall and adapt to the situation to stick to the roadmap. Meanwhile, the company is focusing on other aspects that do not require face-to-face meetings — such as exchange listings and partnerships.
Matic, another blockchain scalability platform, saw numerous partnerships in March despite the postponement of important events. Chandresh Aharwar, the vice president of operations and marketing at Matic, told Cointelegraph:
“Overall, remote working has worked for us well, and I personally see that overall performance of the team has improved (we have been hiring continuously in this times also, so that is also playing a role).”
However, the remaining projects saw their plans significantly affected by the outbreak of the coronavirus. In a recent blog post, the Filecoin team explained that some of the project’s community members in China have requested a delay before launching the second version of the testnet, thus affecting the final mainnet launch that was later postponed until the summer of 2020.
Some projects report financial losses and partnership disruptions caused by postponing critical events. Gary Bracey, the CEO of Terra Virtua, told Cointelegraph that the project is about six weeks behind schedule:
“We had originally planned to conduct a wide beta test in mid-March, with an official launch intended for April. Due to the prevailing conditions, we have had to adapt our strategy accordingly. Key to this was our development studio, as each individual had to take their equipment from the office and set-up at home.”