Australian Digital Asset Advisory Firm Reports 89 Percent Fall in Revenue
Digital X, a token sale advisory and blockchain development firm in Australia, has announced abysmal performance for fiscal year 2019, as reported by Micky, September 1, 2019. The bear market in cryptocurrency brought down a lot of companies, most of which have been able to initiate a bounce back up after the resurgence of Bitcoin. Their partnership with media company Coincast is now may not be viable anymore.
Performance in 2019
Despite crypto winter wiping out a significant amount of value from the market, blockchain development and adoption was still soaring in 2018, so it is surprising to see a company involved with development and advisory witnessing a poor financial performance.
Revenue for the previous period stood at $8.2 million while the company reported an 89 percent drop to $927,000 this year. Meanwhile, company stock is also down almost 93 percent, likening its performance to low cap altcoins.
Assets in their advisory division have fallen to less than 10 percent of their value from just a year ago. Despite the plethora of negative aspects from this year, Digital X is still confident in their ability to turn the ship around and remains committed to the blockchain industry and token advisory.
Though the company was able to keep expenses from growing too rapidly, their financial statements show that their inability to attract new clients and garner revenue from existing clients is the main reason for financial turmoil.
Blockchain Narrative Was Strong in 2019
Surprisingly, during crypto winter a lot of companies were still moving toward blockchain integration. A mining stock like Hut8 reporting poor results is entirely understandable, as their entire business model is predicated on the value of digital currencies their mine.
However, given that Digital X was a consulting and advisory firm, their performance signals one of two things: they are unable to deliver results to their clients or companies are increasingly insourcing setting up their blockchain.
Data management is sensitive and an open database like a blockchain requires companies to take stringent measures. In light of this, it may be entirely possible that companies are setting up in house teams to set up their distributed capabilities instead of hiring external consultants and advisors.
Moreover, the demand for token advisory has mellowed down after the ICO bubble. The new IEO model involves the project working with exchanges who provide the necessary expertise for them to execute their projects.