DAVOS, Switzerland - As the world’s leaders gathered last week for the World Economic Forum (WEF) in Davos, Switzerland to discuss “History at a Turning Point: Government Policies and Business Strategies,” the tone of the crypto conversation seemed markedly evolved. Each year, the biggest influencers and leaders in government, top businesses, global media, and representatives all over the globe convene over solutions to society’s biggest problems with a focus on inequality, climate change, the future of technology, and geopolitical conflict.
However, most notable was the clear indication of a greater level of maturity for blockchain technology as the quaint Swiss town transformed overnight into a blockchain hub. An estimated 50% of local storefronts on Davos’ Main Street were occupied by blockchain or cryptocurrency firms through the duration of the event. At the same time WEF, for the first time, held panels on the future of cryptocurrencies and decentralized finance and invited blockchain leaders to participate.
Recognized blockchain giants present among the elite were Polygon, PolkaDot, Casper, and Circle. Tether offered people free pizza to celebrate Bitcoin Pizza Day on May 22, the first day a digital currency was used to purchase a physical commodity.
However, in the shadow of the recent Terra LUNA / UST collapse, it was the anticipation of regulation, the growing demand for enterprise-grade blockchain business applications, and the increased need for digital asset education that drove a significant amount of the blockchain and cryptocurrency conversation.
CasperLabs, a recent addition to IBM's Global Partner Program which caters to enterprises looking for rapidly deployable blockchain apps through its Casper Network, hosted a series of panels on the rising "blockchain for business" demand. “Blockchain technology has evolved to the point where the vast majority of businesses and governments worldwide are either actively assessing use cases or already running them,” said Mrinal Manohar, CEO and Co-founder at CasperLabs. “It is a transformative business platform that is changing the global economic landscape.”
Participating as part of Casper Network’s presence, John Sarson spoke about the current cryptocurrency environment and what to expect in the coming months. The crypto market seems to still be tied to the traditional stock market these days, but much of the hype from speculators has been on its way out and organic users have become more important to the crypto ecosystem. Signs of decoupling may become more visible as this evolves.
Another important conversation was around digital asset adoption from financial advisors. Financial professionals in the United States are behind the 8-ball when it comes to understanding cryptocurrencies and explaining it to their clients and the clients are trusting their advisors to be on the leading edge of finances for them. "Unfortunately there’s only a 5% penetration rate in intermediary advised asset management in digital assets. Eventually 100% of financial advisors will be advising their clients on digital assets,” Sarson explained. Sarson noted that regulation would help build confidence for financial advisors and the desire for more knowledge on cryptocurrencies.
“We are calling this summer 'regulation summer.' The old narrative around cryptocurrency being an inflation hedge is broken. It has been trading like a risk asset since July 2021. Issues such as the ones involving Iron Finance, Olympus DAO and more recently LUNA/UST, in which $60B was erased from value of people’s portfolios, has resulted in investor confidence being broken, said Sarson. "With protocol owned liquidity projects and algorithmic stable coins, it's three strikes and you're out. It will take time before confidence is rebuilt around DeFi. We have an open invitation for regulation as SEC, CFTC, and other regulating bodies have been building up their staff around cryptocurrency," Sarson concluded.
However, despite the anticipated regulation considerations and recent market turbulence, the cryptocurrency investment thesis remains strong stressed Sarson.
“Any optimism for 2022?” a participant asked Sarson. “There are many reasons to be optimistic," Sarson replied. "This is the 5th time that cryptocurrency has gone through an 80% correction in its 12 year lifespan. The recent bull market ended not because exuberance was exhausted."