Cowed crypto crowd feel winter freeze at World Economic Forum
After a near $1.4 trillion wipeout in 2022, the crypto industry is more reserved and several companies spotted last year are not in attendance
IN the snow and ice on the main drag in Davos, the effects of crypto winter are clear to WEF attendees.
Last May, the storefronts lining both sides of the promenade street that runs through the Swiss ski resort were dominated by crypto firms, peddling bitcoin.
Now there are only a handful and the executives arriving at Davos have swapped their hoodies for blazers despite the sub-zero temperatures outside.
Over the past few years at the World Economic Forum in Davos, Switzerland, the number of cryptocurrency industry attendees has boomed.
But after a near 1.4 trillion wipeout in 2022, the crypto industry is being a bit more reserved with how it splashes the cash and several companies spotted last year are not in attendance. 2022 was marked by failed crypto projects, liquidity issues and bankruptcies, topped off by the collapse of major exchange FTX.
When the World Economic Forum was held last May, bitcoin was hovering around
30,000, after having already fallen more than 50 percent from its all-time high hit in November 2021. More pain followed with bitcoin dipping as low as 15,480.
The Promenade is the main street in Davos where companies and governments take over shops and cafes for the week. Last year, crypto firms from all walks of life took over the place. But since the market slide, there are far fewer crypto firms with flashy store fronts at Davos.
Some of the digital industry insiders who set up shop on the sidelines of the World Economic Forum (WEF) annual meeting quickly distanced themselves from cryptocurrencies.
Jeremy Allier, CEO of USDC stablecoin issuer Circle, said, “I hope there will be more focus on the utility value and practical use of the technology, and less on retail investors chasing meme coins. will.”
“There was a lot of nonsense,” Allier told the Reuters Global Markets Forum.
Raghuram Rajan, a former governor of the Reserve Bank of India, believes that last year’s decline in digital assets allows investors to focus on the true value of the technology.
“We are now at the right place in terms of crypto,” he said. Executives at Davos said they are now about the promise of blockchain technology, proper control and regulation, and disruption in financial services and beyond.
“We are an infrastructure, a plumbing game. Today we build infrastructure for digital assets, which is crypto. Tomorrow it will be different assets,” said Dmitry Tokarev, chief executive of Copper, which provides custody services.
“I would ask some of the things I saw, ‘What’s the return on this ’” Tokriev added, referring to the large presence of crypto companies at the last WEF meeting, unusually held in May. was done The COVID-19 pandemic.
“We have always ignored the noise. All our partners were here last year. They are here this year,” added Tokarev.
The world of digital assets has changed drastically since May, with the crypto market dwindling and some major crypto companies going under as investors pull back from riskier assets in the face of rising interest rates.
The market capitalization of cryptocurrencies has shrunk to 1.4 trillion, a third of its value from its peak in late 2021, and some prominent crypto firms are under pressure or under pressure, including the demise of crypto exchange FTX.
“There’s a place for commercial use cases but they can’t be the only focus, we need to move to more real use cases and focus there,” said Danielle Dixon, CEO of the Stellar Development Foundation.
While interest in technology remains, the conversation is turning to responsibility.
Swiss bank UBS chairman Colm Kelleher told a WEF panel that blockchain technology will help banks cut costs. But he said the industry needs to figure out the basics, such as antimoney laundering controls.
“We kind of dodged a bullet,” Kelleher said, noting that the devaluation of cryptocurrencies did not cause systemic problems. “We had investors who wanted to invest in the coin. And we had to draw a line that suited those investors,” he added.
at Siu, co-founder of Hong Kong-based blockchain gaming developer Animuka Brands, was a supporter of the firms at Davos. “These are companies that have cash positions and income generating companies,” Siu said. “They are billion-dollar enterprises.”
Crypto is trying to establish its presence, said Skybridge Capital founder Anthony Scaramucci, “nowhere more establishment than the World Economic Forum.” Scaramucci has maintained a bullish stance on crypto despite losses over the past year.
Back on the Davos Promenade, some signs of crypto’s lost hegemony persist.
There was a bright orange Mercedes parked outside the pavilion promoting blockchain earlier in the week. On the hood, instead of the automaker’s emblem, there was a copper-colored badge for Bitcoin.
The tires were emblazoned with a slogan in white: “Bitcoin We Trust”.
On Monday, a flashy bright orange Mercedes-Benz car was parked outside of the Blockchain Hub on the Promenade.
The orange Mercedes was parked along the Promenade in Davos. Nobody in the vicinity saw who parked it there. The license plate says “Kuna” on it, which is the name of a Ukrainian cryptocurrency exchange. Michael Chobanian, the founder of Kuna, confirmed that the car belongs to him.
The orange Mercedes was parked along the Promenade in Davos. Nobody in the vicinity saw who parked it there. The license plate says “Kuna” on it, which is the name of a Ukrainian cryptocurrency exchange. Michael Chobanian, the founder of Kuna, confirmed that the car belongs to him.
A coin that represented a bitcoin was placed where the Mercedes-Benz logo would usually be. On the tires and the licenses plate, the words “in crypto we trust” were printed. The license plate had the Ukrainian flag on it and the name Kuna, which is the company behind a cryptocurrency exchange of the same name.
Kuna also set up the “reserve fund of Ukraine” after the war with Russia began where people could donate crypto to Ukraine. People in the vicinity that CNBC spoke to could not verify who parked the car there.
However, two crypto executives who spoke to CNBC did not welcome the orange car, particularly after the market crash and the excesses of the industry were exposed. One remarked that the presence of such a car was not helpful for the industry’s reputation which took a hit last year.
CNBC reached out to Semen Kaploushenko, CEO of the Kuna exchange, via LinkedIn, but is yet to receive a response.
CNBC also reached out to the Blockchain Association of Ukraine which Kuna founder Michael Chobanian is the president of, but is yet to receive a response.