A $1.4 trillion wipe hit the crypto industry at the WEF

There were fewer crypto companies lining the boardwalk at Davos 2023 than in previous years following the market crash. Circle, the company behind the stablecoin USDC, was one of the few in attendance.

Arjun Kharpal | CNBC

DAVOS, Switzerland — Over the past few years at the World Economic Forum in Davos, Switzerland, the number of participants in the cryptocurrency industry has been on the rise.

But after missing nearly $1.4 trillion in 2022, the crypto industry is a little more reserved about how it splashes the cash and several companies spotted last year are absent. The year 2022 was marked by failed crypto projects, liquidity problems and bankruptcies, topped off by the collapse of the major FTKS exchange.

When the World Economic Forum was held last May, bitcoin hovered around $30,000, after already falling more than 50% from its all-time high in November 2021. More pain followed with bitcoin falling as low as $15,480.

The Promenade is the main street in Davos where businesses and governments take over shops and cafes during the week. Last year, crypto firms from all walks of life took over. But since the market crash, there are far fewer crypto firms with flashy storefronts in Davos.

One store that sells non-fungible tokens, or NFTs, has disappeared. The prices of NFTs, which are digital collectibles, also fell last year. The rest are companies that survived the bear market and want to expand their business.

“It’s very clear that the period of speculation is coming to an end and every company you see … is really focused on real-world use cases,” said Teana Baker-Taylor, vice president of policy and regulatory strategy at Circle, the company behind the USDC stablecoin. .

A stablecoin is a type of digital currency that is supposed to be pegged one-to-one with fiat currency. USDC is pegged to the US dollar. Circle says it is backed by real assets such as US Treasuries, so one USDC can be redeemed for $1.

Casper Labs, a company that built a blockchain designed to be used by businesses, runs a space on the Promenade called the Blockchain Lab. Casper Labs was also present last year at Davos.

Cliff Sarkin, head of strategic relationships at Casper Labs, said he is “cautiously optimistic” that the crypto market has bottomed.

“So we’ve been in a bear market for over a year now, so I think the shock of that has settled and for those of us who have been in the space for years … we feel like this is a time to build,” Sarkin told CNBC.

He added that the crypto firms left at Davos are “core projects” and “real businesses” compared to things like NFTs.

There were also those in traditional finance who embraced fewer crypto firms.

Mark Haefele, chief investment officer at UBS Global Wealth Management, was asked during an event organized by the Swiss bank what he would like to see in Davos this year. He said he’s seen it before: “There’s less crypto on the high street.”

The Mysterious Case of the Orange Bitcoin Car

On Monday, a flashy bright orange Mercedes-Benz car was parked in front of the Blockchain Hub on the Promenade.

An orange Mercedes was parked along the promenade in Davos. No one nearby saw who parked it there. The license plate says “Kuna”, which is the name of the Ukrainian cryptocurrency exchange.

Arjun Kharpal | CNBC

A coin that represented Bitcoin was placed where the Mercedes-Benz logo would normally be. The words “in cripto ve trust” were printed on the tires and license plates. On the license plate was the Ukrainian flag and the name Kuna, which is the company behind the cryptocurrency exchange of the same name.

Kuna also established a “reserve fund of Ukraine” after the war with Russia started where people could donate cryptocurrencies to Ukraine.

People nearby that CNBC spoke to could not verify who parked the car there.

However, two crypto executives who spoke to CNBC did not welcome the orange car, especially after the market crash and the exposure of the industry’s excesses. One noted that the presence of such a car was not helpful to the reputation of an industry that had taken a hit last year.

CNBC reached out to Semen Kaploushenko, the CEO of the Kuna Exchange, via LinkedIn, but has yet to hear back.

CNBC also reached out to the Blockchain Association of Ukraine, whose founder is Kuna Michael Chobanian, but has yet to hear back.

The words “in cripto ve trust” were printed on the license plates and tires.

CNBC | Arjun Kharpal

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