The deep chasm between cryptocurrency evangelists and their opponents has perhaps never been more pronounced.
On Wednesday, Andreessen Horowitz, the most prominent venture capital group in Silicon Valley USA, placed a $4.5 billion bet. [4,2 mil milhões de euros] into what he called the “golden age” of cryptocurrencies, citing the “massive wave of world-class talent” that entered the industry last year.
“That’s why we decided to do more,” wrote Chris Dixon, the company’s managing partner.
On the same day, the once bullish investor made headlines that predicted that Bitcoin could fall to $8,000 from its current level of around $30,000.
“Bitcoin, like any cryptocurrency at the moment, has not proven itself to be a credible institutional investment,” Scott Minerd, chief investment officer at Guggenheim Partners, told Bloomberg News at the World Economic Forum in Davos. “It’s become a market for a bunch of euphoric and stagnant people.”
This is very different from last February, when Minerd told CNN’s Julia Chatterley that she could see bitcoin, which was trading around $40,000 at the time, up to “$400,000 to $600,000.”
Bitcoin peaked at $69,000 in November. Since then, it has lost more than half its value as investors began dumping riskier assets in the face of rising interest rates.
Despite the crash, there have been several discussions about cryptocurrencies and digital money in Davos this year, not to mention a number of cryptocurrency-related vendors along the city’s famous seawall. But the institutional voices at the summit wereted no time in vilifying the web3 crowd.
“Bitcoin can be called a currency, but it is not money,” said International Monetary Fund CEO Kristalina Georgieva on the first day of the event. “It’s not a stable store of value.”
So where do we go from here?
It is easy to observe the daily volatility of cryptocurrencies as well as secondary projects such as Earth and Moon enter the “spiral of death” and abandon the technology blockchain and the philosophy behind them. But crypto advocates say that despite their problems, they are not going anywhere.
For starters, according to some experts, the cryptocurrency must face a branding challenge. The term “cryptocurrency” can be misleading, Marcus Sotiriou, an analyst at GlobalBlock, a digital asset brokerage, told me.
“99% of cryptocurrencies are not trying to be coins – they are trying to be active behind these blockchain networks,” he said. “And I think it’s only a matter of time before all the companies somehow integrate blockchain“.
Calls for stricter regulation are on the rise, especially after the collapse of TerraUSD and its sister currency Luna earlier this month. Many proponents support stricter compliance, in part because it could help cryptocurrencies gain market credibility. There are currently about 300 million cryptocurrency users, and Sotiriou says that number is doubling every year, nearly double the historical level of internet adoption.
“While sentiment is very, very negative at the moment, and everything seems doomed and gloomy,” he says, “the real fundamentals of cryptography haven’t changed.”
