The World Economic Forum in Davos this week saw Bitcoin and other cryptocurrencies come under the spotlight again, a year after being roundly criticized by world leaders. Speaking to CNBC, Jamie Dimon refused to relish in Bitcoin’s 2018 downfall when given the opportunity, saying he didn’t take any satisfaction from watching it drop 80%, and also stating that after seven years of talking about blockchain “no one’s effectively done something.” To an extent this is true, in that there doesn’t yet exist a standout product or service that is a fantastic exponent of blockchain technology, but this is neglecting to take into account how young the technology is and that most startups in the space have only really been around for 2-3 years.
Bitcoin Going to Zero… Again
Headlines were also made by Jeff Schumacher, founder of BCG Digital Ventures. When talking on a panel with other blockchain and cryptocurrency big hitters, he said that Bitcoin was headed to zero, as it didn’t serve its primary purpose of being a currency, and for environmental reasons:
If it became the standard currency…if it became the ‘gold standard’…it would be responsible for 20% of the world’s CO2 production, so just by that alone, it tells you it’s not going to be the go forward thing.
Comparison with the gold standard, which Schumacher says would bring Bitcoin to a $7 trillion market cap, is precisely what the Winklevoss twins think Bitcoin will achieve in the future. Schumacher doesn’t give any timelines, either in his prediction that Bitcoin will go to zero or, if it were destined to do so, reach $7 trillion in market cap. This is important, because it doesn’t take into account any technological advances in mining equipment or a change of consensus algorithm that may take place in the coming years or decades. Glenn Hutchins, co-founder of Silver Lake Partners, said Bitcoin’s role in the future may be as a store of value rather than a currency, which is the view held by many who feel it has potential but that other coins could serve better as currencies.
Change in Sentiment
The sentiment towards Bitcoin and cryptocurrencies has been understandably different than in 2018, when the talk was of the hype around the dramatic price action, where a much more aggressive stance was taken against it. This year’s conversations have been more muted in tone, as more standard financial issues have taken precedence in light of Bitcoin’s fall from grace. Given this paradigm has shifted so much in just twelve months, it will be interesting to see where Bitcoin and cryptocurrencies fall in the pecking order at Davos 2020.