Cryptocurrencies are dead. Long live cryptocurrency

Perhaps the deep gulf between crypto evangelists and their opponents has never been more apparent.

On Wednesday, Andreessen Horowitz, the most prominent venture capital group in the US Silicon Valley, made a bet of $4.5 billion. [4,2 mil milhões de euros] In what he called the “golden age” of cryptocurrency, referring to the “massive wave of global talent” that entered the industry in the past year.

“That’s why we decided to take it big,” wrote Chris Dixon, managing partner of the company.

On the same day, a bullish investor made headlines predicting that Bitcoin could drop to $8,000 from its current level of around $30,000.

“Bitcoin, like any cryptocurrency at this point, has not established itself as a reliable institutional investment,” Scott Minerd, chief investment officer at Guggenheim Partners, told Bloomberg News at the World Economic Forum in Davos. “The market has become a group of jubilant and stagnant people.”

It’s a big change from February of last year, when Minerd told CNN’s Julia Chatterley that she could see bitcoin, which at the time was trading around $40,000, up to “$400,000 to $600,000.”

Bitcoin peaked at $69,000 in November. It has lost more than half its value since then, as investors began withdrawing from riskier assets in the face of rising interest rates.

Despite the crash, there were many panels about cryptocurrency and digital money in Davos this year, not to mention a number of crypto-related vendors along the city’s famous seawall. But institutional voices at the top wereted no time in denigrating Web 3.

“Bitcoin may be called a currency, but it is not money,” Kristalina Georgieva, Managing Director of the International Monetary Fund, said on the first day of the event. It is not a static store of value.

So where do we go from here?

It is easy to watch the daily fluctuations of cryptocurrencies, as well as fringe projects like earth and moon To enter into a ‘death spiral’, ignoring technology blockchain and the philosophy behind them. But crypto-believers say they won’t go far despite their problems.

For starters, according to some experts, crypto has to face its trademark issue. Marcus Sotirio, an analyst at GlobalBlock, a digital asset brokerage, told me that the term cryptocurrency can be misleading.

“99% of cryptocurrencies are not trying to be currencies – 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 are somehow integrated blockchain“.

Calls for closer regulation are growing, especially after the collapse of TerraUSD and its sister currency, Luna, earlier this month. Many advocates support a larger application, in part because it can help encryption gain credibility in the marketplace. There are currently an estimated 300 million cryptocurrency users, and Sotiriou says the number is doubling each year — nearly double the historical rate of internet adoption.

“While feelings are very negative at this point, and everything seems to be bad and bleak, the real fundamentals of coding haven’t changed,” he says.