Cryptocurrencies were front and center at this year’s World Economic Forum meeting in Davos. The cryptocurrency industry has only grown more popular since it was first introduced back in 2010, so much so that companies based solely on blockchain technology now dominate proceedings. During the meeting, it was noted how significantly the industry grew compared to 2020.
Crypto continues to cast a long shadow over other industries despite the recent market crash triggered by the collapse of stable coin terra USD, leading sister token Luna down to $0 last month. In addition, global regulators are shifting their focus on this new growing area.
Cryptocurrencies are becoming more popular by the day, with thousands currently in use. However, many industry executives view the market as unsustainable and visionaries such as Brad Garlinghouse, Betrand Perez, and Brett Harrison have gone on record to echo such sentiments.
When asked about the future of cryptocurrencies, Garlinghouse predicted that there might only be a handful in circulation. He noted how over 180 fiat currencies exist today with little to no need for more than a few cryptocurrencies
Even though the crypto market is in an analogous situation to what occurred during the early internet era, Perez compared it with how many scams were abundant back then. However, in Harrison’s opinion there are “a couple” of clear winners when looking at blockchain platforms today.
Jeremy Allaire, CEO of Circle has said that the terraUSD collapse made it clear to people that not all stable coins are created equal.
“It’s helping people differentiate between a well-regulated, fully reserved, asset-backed dollar digital currency, like USDC, and something like that (terraUSD),” said Allaire.
The co-founder of stable coin Tether, Reeve Collins said that the terraUSD saga will likely mark an end for most algorithmic coins.
The crypto market crash may seem like a cause for concern, but it’s actually been seen as an opportunity by many in the industry. As several major coins fell more than 50%, there are those who see the crash as an opportunity. “We’re in a bear market, and I think that’s good,” said Betrand Perez. “It’s good because it’s going to clear the people who were there for the bad reasons.”
Other executives agreed that the recent price hike was too much for people to ignore and forced them into speculation rather than product development.
“The market, in my personal opinion, became maybe a little bit irrational, or maybe a little reckless to a certain extent,” explained Polygon CEO Mihailo Bjelic, “And when the times like that come, a correction is normally needed, and at the end of the day is healthy.”