Cryptocurrency crowd shakes off market woes at upbeat TOKEN2049 conference

The first day of this year’s TOKEN2049 cryptocurrency conference kicked off in Singapore on Wednesday, its second in-person event since the start of the Covid-19 pandemic.

If the virus failed to dampen the 2021 event at the height of the pandemic threat last year, this time its organizers were likely not intimidated by Covid as most of the world slowly learns to live with it.

A more obvious cause for concern is the ongoing crypto winter, ushered in by a collapse in crypto prices and the $40 billion collapse of the Terra Luna stablecoin project in May, all of which coincided with broader turmoil in the global economy coincided.

In fact, the opening session was factually titled “Global Macro Uncertainty: The Crypto Narrative.” But attendees at the event, which drew thousands of people, showed no obvious signs of concern given the prevailing gloom.

TOKEN2049, the flagship event of this year’s Asia Crypto Week in the Southeast Asian city-state, was notable for its forward-thinking, optimistic approach, with day one sessions covering topics including why the collapse in cryptocurrency valuations isn’t as bad as it looks , the rise of stablecoins, how the crypto industry can drive mass adoption, and the opportunity offered by Crypto Winter.

Zaheer Ebtikar, portfolio manager at LedgerPrime, a digital asset quantification firm, told participants that risks and returns are being mispriced.

“Whenever you’ve had a steady stream of only negative news in the last nine months, it’s really hard to keep winding that negative string, isn’t it? So it’s like, you had the Russia invasion, you have like the energy crisis, you’re getting really cold during that time [European] winter,” he said.

“[But] I think we have a much more compelling reason to envision why crypto has likely bottomed and why traditional markets may be uncertain… so I’m pretty optimistic about year-end. I think positioning should still be cautious in general, but I think you’re getting to the bottom of that really bearish top.”

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Darius Sit, managing partner of crypto-asset trader QCP Capital, echoed this sentiment, saying he remains positive as the year draws to a close and that he thinks next year would offer moderate upside potential.

Jordi Alexander, Selini Capital’s chief investment officer, said: “I think we’re going to see some crazy things over the next few months – crazy headlines like we saw recently with the pound. So [I’m] Very cautious in the longer term. For example, what makes me extremely optimistic is things like bitcoin, ETH, where you have a limited supply and you have a kind of generation that is becoming more interested in those assets.”

He added that because crypto is so liquid, it typically anticipates moves in other asset markets, and that he expects crypto assets to return to positive territory ahead of equities.

Other speakers at the conference expressed similar views, with Dan Morehead, founder and chief executive of Pantera Capital, saying that blockchain is strongly positioned in the medium to long term.

“I’ve seen three massive bear markets in 10 years and I have to admit that the first few days I was really sweating and I thought I don’t know if blockchain is going to work… Maybe something really bad will happen,” he said.

“This cycle is completely different – ​​the fundamentals are so strong. There are already 200 million people using blockchain. The only thing you need to interact with blockchain is a smartphone, and there’s 4 billion people who have one, so I think in just three or four years we’re going to have a billion people using blockchain .”

Bright side

Mike Novogratz, chief executive of Galaxy Investment Partners — an investor in Terra and one of his first public speeches since the project’s collapse — has been confident, even philosophical, about the crypto market’s declines this year.

“I really like looking at the positive side of the past month as the S&P took a hit [by inflation] … Bitcoin is down just 5% while the S&P is down 10%,” he said.

Image: Mike Novogratz (CEO, Galaxy), Haslinda Amin (Bloomberg)

He added that bitcoin has outperformed a basket of currencies that included the euro, sterling, Mexican peso and South Korean won by about 20% and that once market conditions stabilized, the world’s native crypto would “take off.” would.

Discussing the Terra implosion and the subsequent bankruptcies of several crypto companies that came into contact with it, he said that their centralized models failed for a variety of reasons, including unethical behavior, irresponsibility, and excessive leverage, and that decentralized financial models would have worked fine.

“For the most part, the protocols worked exactly as they should, so ironically it’s a real advertisement for on-chain,” he said. “It was the centralized companies, which are doing really badly, that exploded.”

stablecoins

Speakers at TOKEN2049 expressed optimism about US dollar-pegged stablecoins, which they believe are an important part of the cryptocurrency landscape as they allow holders in high-inflation economies to brace against the erosion of the value of their own currencies to secure.

Will Peets, chief investment officer at 100 Acres Ventures, who focuses on digital assets, said, “Stablecoins … seem kind of boring if you’re into crypto because we’ve been talking about that [them] forever… But the reality is that there are $150 billion worth of dollar-backed stablecoins out there. This is the first time we’re entering an era where you can just have a currency crisis and have access to dollars outside of your banking system, which is a big deal.”

Tron founder Justin Sun said stablecoins are a focus of the San Francisco-headquartered blockchain, which he says is home to more than $40 billion of them. He added that they acted as a reliable store of value for their holders in Asia.

“A lot of people in the United States probably don’t understand that because in the United States anyone can get a US dollar bank account,” he said.

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Image: (LR) Emma Cui (CEO & Founding Partner, LongHash Ventures), Justin Sun (Founder, Tron), Saurabh Sharma (Partner & Head of Investment, Jump Crypto), Constance Wang (COO, FTX)

In an apparent reference to China, Sun said: “For most countries in Asia – you know, you don’t even have to name it – people don’t have access to US dollars at all, so I’d say 95% of the population just can.” own their own currency. You cannot exchange US dollars.”

Alexander of Selini Capital said at the conference that the supremacy of the US dollar, presumably including its dominance in the stablecoin space, has prompted a backlash from China and Russia, with the former making rapid strides in developing its own central bank digital currency (CBDC). make. to challenge the dollar’s influence on the world economy.

“It will be easier for them to fight on this new battlefield – the digital battlefield – than on the traditional battlefield.”

Convenience

One of the other attributes of stablecoins identified by speakers was their convenience, which Ebtikar said offered scope for increased mass crypto adoption.

“Stablecoins are a popular topic for everyone simply because they are really amazing as an innovation for the whole world,” he said. “The ability for me to send $100,000 without having to do endless things [know-your-customer] is such a blessing. This is an amazing, amazing innovation and I don’t think it gets enough love. And that expansion is probably one of the best ways for crypto to grow.”

The growth and development of the crypto industry very much formed the overarching agenda of TOKEN2049, as speakers and attendees sought to capitalize on the spirit of innovation that has underpinned the crypto experiment for the past 13 years.

Selini Capital’s Alexander seemed to speak for many of those for whom the bear market had raised tough questions, saying, “What’s important is the crypto narrative… What’s really important is not just using this market to build … you have all the stuff that people are building – how about your market for philosophy? Let’s think about what we actually use this technology for. Where does it fit in?”

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