Along the Davos promenade in 2023 there were fewer crypto companies than in previous years after the stock market crash. Circle, the company behind the USDC stablecoin, was one of the few present.
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 exploded.
But after wiping out nearly $1.4 trillion in 2022, the crypto industry is a bit more guarded about how it splashes the cash, and several companies spotted last year are missing out. The year 2022 was marked by failed crypto projects, liquidity problems and bankruptcies, capped by the collapse of the major exchange FTX.
When the World Economic Forum was held last May, bitcoins was hovering around $30,000, having already fallen more than 50% from its all-time high in November 2021. More pain followed with bitcoin plunging as low as $15,480.
The Promenade is Davos’ main street where business and government take over shops and cafes for the week. Last year, crypto companies from all walks of life took over. But since the market crash, there are far fewer crypto companies with flashy storefronts in Davos.
A store selling non-fungible tokens, or NFTs, has disappeared. Prices for NFTs, which are digital collectibles, also fell last year. What remains are companies that survived the bear market and are looking to expand their business.
“It’s very clear that the speculation period is coming to an end and every company you see featured…is really focused on real-world use cases,” said Teana Baker-Taylor, vice president of the 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 individually with fiat currency. The USDC is pegged to the US dollar. Circle says it is backed by real-world assets such as US Treasuries so one USDC can be redeemed for $1.
Casper Labs, a company that built a blockchain designed for use by businesses, runs a space on the Promenade called Blockchain Lab. Casper Labs was also present last year in Davos.
Cliff Sarkin, head of strategic relationships at Casper Labs, said he was “cautiously optimistic” that the crypto market has bottomed out.
“So we’re over a year into the bear market, so I think the shock is over and for those of us who have been in space for years…we think it’s time to build” , Sarkin said. CNBC.
He added that the crypto companies that have remained in Davos are “bottom line projects” and “the real business” compared to things like NFTs.
There were also those in traditional finance that welcomed fewer crypto businesses.
Mark Haefele, chief investment officer at UBS Global Wealth Management, was asked at an event hosted by the Swiss bank what he would like to see in Davos this year. He says he’s seen it before: “It’s less crypto on the main street.”
On Monday, a flashy bright orange Mercedes-Benz was parked outside the Blockchain Hub on the Promenade.
The orange Mercedes was parked along the Promenade in Davos. Nobody around saw who had parked it there. The license plate says “Kuna” on it, which is the name of a Ukrainian cryptocurrency exchange.
Arjun Kharpal | CNBC
A bitcoin coin was placed where the Mercedes-Benz logo would usually be. On the tires and the license plate, the words “in crypto we trust” were printed. The license plate bore the Ukrainian flag and the name Kuna, which is the company behind a cryptocurrency exchange of the same name.
Kuna also created the “Ukraine Reserve Fund” after the war with Russia started, where people could donate crypto to Ukraine.
Nearby people CNBC spoke to couldn’t verify who parked the car there.
However, two crypto executives who spoke to CNBC did not welcome the orange car, especially after the stock market crash and excesses in the industry came to light. One of them remarked that the presence of such a car was not beneficial for the reputation of the industry which had taken a hit last year.
CNBC reached out to Kuna Exchange CEO Semen Kaploushenko via LinkedIn, but has yet to hear back.
CNBC has also contacted the Blockchain Association of Ukraine, of which Kuna founder Michael Chobanian is the president, but has not yet received a response.
The license plate and tires had the words “in crypto we trust” printed on them.
CNBC | Arjun Kharpal