On Wednesday, Andreessen Horowitz, Silicon Valley’s most famous venture capital group, bet $ 4.5 billion on what it called a “golden age” for cryptocurrencies, citing a “huge wave of world-class talent” that entered the industry last year.
“That’s why we decided to grow up,” wrote Chris Dixon, managing partner at the company.
On the same day, a once rising investor made headlines predicting that bitcoin could fall to $ 8,000 from its current level of about $ 30,000.
“Bitcoin and any cryptocurrency have not yet established themselves as a reliable institutional investment,” Scott Minerd, chief investment officer of Guggenheim Partners, told Bloomberg News at the World Economic Forum in Davos. “It really has become a market for a bunch of yahoo and stagnant waters.”
This is a major change since last February, when Minerd told CNN’s Julia Chatterley that she could see that bitcoin, which was trading at about $ 40,000 at the time, would eventually jump to $ 400,000 to $ 600,000. “. Bitcoin peaked at $ 69,000 in November. It has since lost more than half its value as investors withdrew from riskier assets in the face of rising interest rates.
Despite the collapse this year, there were several panels on cryptocurrencies and digital money in Davos, not to mention a series of cryptocurrency providers on the city’s famous waterfront. But the voices of the summit’s establishment wasted no time ignoring the web3 crowd.
“Bitcoin can be called a coin, but it is not money,” said Kristalina Georgieva, managing director of the International Monetary Fund, on the first day of the event. “It’s not stable value storage.”
So where do we go from here?
It is easy to observe the daily volatility of cryptocurrencies, as well as peripheral projects such as Terra and Luna, entering a “death spiral” and rejecting the blockchain technology and philosophy that supports them. But cryptocurrency believers say that despite its problems, cryptocurrency is not disappearing.
On the one hand, according to some experts, crypto should face the problem with the brand.
The term cryptocurrency can be misleading, said Marcus Sotiriou, an analyst at digital asset brokerage GlobalBlock.
“Ninety-nine percent of cryptocurrencies are not trying to be currencies – they are trying to be assets behind these blockchain networks,” he said. “And I think it’s only a matter of time before all companies integrate the blockchain in some way.”
Calls for tighter regulation are on the rise, especially after the collapse of TerraUSD and its coin sister, Luna, earlier this month. Many advocates support greater oversight, in part because it could help cryptocurrencies gain widespread trust. There are currently about 300 million cryptocurrency users, and Sotiriou says the number is doubling every year – almost twice the historical rate of Internet acceptance.
“Although the mood is very, very negative at the moment and everything looks like doom and gloom,” he said, “the real foundations of cryptocurrency have not changed.”
Sending to Davos
Here is Julia Horowitz, the lead author of Before the Bell, sent from Davos, Switzerland, where she reports on the World Economic Forum.
Mikhail Fedorov, Minister of Digital Transformation of Ukraine, has a message to technology giants SAP and Cloudflare: Get out of Russia now.
I spoke with Fedorov on the sidelines of the Davos summit, the first place he has visited outside of Ukraine since Russia invaded three months ago. He was here on a mission to urge business and government leaders to do more to help, and met with leaders from Google, Microsoft and Meta on Facebook.
“Each of us can do even better,” he said.
Nearly 500 technology companies have left Russia since President Vladimir Putin sent troops to Ukraine on February 24, according to Fedorov’s census. But he called on technology companies Cloudflare and SAP to continue working in Russia, which he said undermines the effectiveness of the “digital blockade”.
“When a company operates on the Russian market, it pumps funds into the Russian budget, from which the money goes to the Russian army,” Fedorov said. “This makes it possible to kill Ukrainians.”
Germany’s SAP, which makes business software, said in April that it planned to leave Russia. However, Fedorov said the company was slowly moving away and needed to move faster.
“I am convinced that they will eventually leave Russia, sooner or later, but sooner [is better] than later because people are being killed, “he said. SAP said in a statement that it was conducting” an ongoing dialogue with the Ukrainian government, which includes talks in Davos “and that it” stands in solidarity with Ukrainians since the start of Russia’s unjustified war. ” .
Cloudflare, meanwhile, said it was still working in Russia to protect the flow of uncensored information to Russians.
“They say they are there to defend some kind of democracy,” Fedorov said.
In a statement, the cloud service operator said that “there are minimal sales and trading activities in Russia” and “terminated all customers that we have identified as related to sanctioned entities.”
Fedorov stressed that the “digital blockade” is an important tool for resisting Russia, as it could turn the country back “two or three decades”, encouraging engineers and other professionals to leave.
“We also want people in Russia to understand that ‘boys, something is wrong.’ And they must face the war, “Fedorov added.
Chinese leaders are panicking
In an unusual move, the Chinese cabinet convened an emergency meeting with more than 100,000 participants on Wednesday, according to state media. Agenda: Do what it takes to save the economy.
During an unexpected video conference, Premier Li Keqiang offered perhaps the darkest assessment of the state of the economy so far by the Chinese leadership. Lee said she was worse off in some ways than she was in 2020 at the time of the initial coronavirus outbreak, writes my CNN Business colleague Jesse Young. He called on leaders across the country to reverse rising unemployment.
Step back: The world’s second-largest economy, which once boasted a growth rate of 10 percent or more, has suffered from its own Covid-19 protocol, which keeps millions under blockade.
Earlier this week, UBS lowered its full-year GDP growth forecast to 3%. China said it expects growth of about 5.5% this year.
Sustainable growth is not just an economic priority. China’s party leadership has retained power in part through engineering growth that has lifted tens of millions of people out of poverty. Leaders are particularly sensitive to signs of social unrest that may be the result of diminishing economic prospects.
Earlier this month, Li, the Communist Party’s No. 2 figure after President Xi Jinping, described the country’s economic conditions as “difficult and difficult”. Despite the difficulties, President Si has only doubled the policy of zero Covid, saying the state will punish anyone who questions it.
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