The whiskey had its work cut out for it.
After a year of massive losses, arrests and unfolding Due to legal issues, many of the world’s biggest cryptocurrency and blockchain companies are returning to Davos this year, hoping to shore up – or resurrect, if necessary – the sector’s image and attract new investors.
The annual gathering of the world’s elite – known for its concentration of billionaires, bankers and heads of state – has become an unlikely destination for an industry that has long presented itself as an alternative to traditional banks, beyond the reach of governments and financial institutions. And while some key players — including Tether, a crypto giant that handed out free pizza at the conference for at least a year — are absent this week, many others are doubling down on their presence, both in official panels and in private stores, yoga studios and churches. they were converted into promotional event spaces for the week.
“We’re coming in with guns blazing,” said Dante Disparte, chief strategy officer of Circle, a digital currency and payments company. He added: “2022 was the collapse time for cryptocurrency. We are now bringing in key executives and releasing lots of content that shows technology is here to stay. It’s durable. This is a crucial part of modernizing the global financial system. This is an important time to set the agenda.
The company, which issues a widely used cryptocurrency pegged to the U.S. dollar, has doubled its investments in Davos this year, with two storefronts on the main street and more than a dozen employees. Like many of its peers, Circle is focusing on topics like trust and accountability this year, calling it a “great reset” period for crypto.
This reset follows a turbulent year for the industry. Cryptocurrencies such as Bitcoins have lost more than half their value over the past year. Entire companies have collapsed, including the $32 billion cryptocurrency exchange FTX, whose spectacular implosion in November landed its founder in prison and raised broader questions about survival. long term of the industry.
Bitcoin’s value fell sharply last year, from more than $45,000 in March to around $16,000 in November. But it has seen a slight recovery in recent days and was trading above $20,000 this week, giving its supporters a boost of optimism.
At the same time, government regulators are beginning to scrutinize the industry with new urgency, issuing fines and subpoenas.
As a result, many blockchain companies, which provide information storage technology to power the crypto market, are focusing on more neutral topics such as sustainability and innovation. Circle’s building bears the slogan “Solving Real World Problems.” Hedera, who has a token that lost 80 percent of its value last year, presents itself as “the greenest blockchain”.
“In the wake of FTX, we have a real opportunity,” said Nilmini Rubin, Hedera’s head of global policy. “You see the bad actors disappear and you’re left with the most stable, well-governed crypto players. This is an opportunity to reclaim what cryptography is and what it can be.
Yet some question the wisdom of spending heavily in Davos at a time when so many people, as well as pension funds and venture capital, have seen their investments wiped out.
“When FTX collapsed, some of the biggest criticisms of the industry were about its excesses: the excessive partying, the celebrity culture, the luxury of the whole lifestyle,” said Yesha Yadav, a law professor at Vanderbilt University whose work focuses on cryptocurrency and financial markets. “So at this point, doubling down on these same things at Davos, it’s a shock.”
But the criticisms are not limited to a single sector. The annual gathering here has been the frequent target of critics who call it tone-deaf and superficial, a place where the elite can debate lofty topics like global unity and climate change while taking little action. This year, the war in Ukraine and heightened fears of a global recession continued to dominate much of the conversation, both at official events and boozy after-parties.
Meanwhile, big-name regulars including Amazon, Microsoft and Facebook parent company Meta continue to have a significant presence here despite thousands of recent layoffs. Salesforce, which this month announced plans to eliminated around 8,000 jobs – or 10 percent of its workforce – has three storefronts, the most of any business, on the hallowed promenade. (Amazon founder Jeff Bezos owns The Washington Post.)
Crypto’s outsized presence in Davos began last year, when currencies like Bitcoin and Ethereum were booming. The conference dedicated two official panels to blockchain technology, and companies spent a lot of money on advertising and creative hobbies. Large billboards brandishing buzzwords like “blockchain” and “Web3” filled the streets and surprised many longtime conference attendees.
This year, that presence is even greater: there are seven blockchain sessions on the official program, including panels on regulation and digital tokens.
“This is an area that we spend a lot of time on,” said Brynly Llyr, head of blockchain and digital assets at the World Economic Forum. “Crypto isn’t always an attractive topic, but we want to demystify it to show that what you see in the headlines isn’t what technology is about.”
Many in the industry say the latest uproar is just an incident. They have dubbed this moment “cryptocurrency winter,” arguing that the recent cooling is just a cyclical correction in a market that will quickly rebound. But skepticism remains high, particularly within government and the traditional financial sector.
“It feels like a last gasp for crypto,” said Jason Furman, an economist at Harvard University, a former adviser to President Barack Obama and a frequent participant at the World Economic Forum. who skipped the meeting this year. “It’s like an ad I saw in a magazine saying the real estate market has never been hotter. You know, these people paid for this ad six months earlier, and by the time it came out, it was just plain fake. It’s crypto in Davos.
But industry executives say the brilliance of Davos as well as its ties to financial firms and world governments have become even more crucial to the sector this year, as regulators introduce new rules and step up oversight. Crypto companies spent $7.1 million on lobbying in 2021, up from $2 million the year before, according to an analysis by the Center for Responsive Politics.
“What the crypto industry really wants is to be established — to be integrated with traditional finance, to be regulated, but on its own terms,” said Hilary Allen, a law professor at American University. “He wants the patina of regulation to attract new investors. The need for new money has become more pressing. So, what better place than Davos?
Back at the Blockchain Hub – funded by blockchain software company Casper Labs – the whiskey tasting was one of more than 50 events planned over four days. Hours earlier, Anthony Scaramucci, the founder of SkyBridge Capital, which purchased $10 million worth of FTX tokens, spoke on a panel about his falling out with the company’s embattled founder, Sam Bankman-Fried.
“I have to tell you that betrayal and fraud are wrong on many levels,” Scaramucci said. “It damaged my reputation. When you have a friend who betrays you like that, it really sucks. But that doesn’t mean it’s the end of blockchain or crypto. »
Down the block, the city’s billboards are aware of the message. “Escape the hell of bank and government control,” says the man promoting a crypto castle in Germany. Another, near a parking lot, proclaims to the world’s richest: “Crypto is not for wealth but for freedom.” And freedom is wealth.
Tory Newmyer and Julian Mark contributed to this report.