We are in “crypto winter”. Here’s what locals think about the industry’s future.

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This includes Abigail Johnson, managing director of Fidelity Investments, which sells crypto-related financial services. She called the slowdown an “opportunity” during a keynote session at a crypto conference last week in Austin, Texas.

“I think this is my third crypto winter,” she said, referring to a long period when cryptocurrency the prices are low. “If you think the fundamentals of a long-term case are really strong, while everyone else is sinking, now is the time to double down and dive deeper into it.”

Abigail Johnson, CEO of Fidelity Investments, at a meeting in 2017. She said she recently called the crypto downturn an “opportunity.”Andrew Harrer/Bloomberg

Fidelity has become a major player in crypto, recently launching a program allowing companies that use its retirement services to offer their employees a bitcoin option in their 401(k) plans. The move caught the attention of the Department of Labor and Senator Elizabeth Warren, who wrote in a letter to Johnson that investing in crypto is a “risky and speculative bet.”

A Fidelity spokesperson said this week that it does not comment on “crypto price volatility.”

Bitcoin, the most popular cryptocurrency, has lost almost a third of its value since last week. With the price of bitcoin now below $21,000 per coin, it is down sharply from a high of over $68,000 in November.

There is a distinct disconnect between the ongoing tone the crypto conferences – notorious for their lavish, over-the-top parties that last until the early hours – and the steep market decline. The macro environment didn’t stop a group of Boston executives from joining some 17,000 people at Consensus 2022, one of crypto’s biggest conferences, last week. They included representatives from Fidelity, as well as leading startups Circle Internet Financial, Algorand and Flipside Crypto.

Crypto critic Molly White, a Massachusetts-based software engineer known for her website called “Web3 is doing very well,said in an interview that there’s an incentive to be “incredibly positive about the crypto space no matter what.” people believe in it,” she said.

She awaits sentiment at upcoming industry conferences, including NFT.NYC next week, will remain positive.

“Nobody’s going to say, ‘Oh my God, maybe we’re in the wrong industry,'” she said. “Obviously people might be a little less willing to talk about their own personal portfolios.”

Molly White, a 28-year-old software engineer, documents the failings of the cryptocurrency industry on her blog “Web3 is Going Just Great”. Tristan Spinski/For the Washington Post

Like Johnson, the Fidelity CEO, other local crypto leaders seem to ignore the bad news.

“Sometimes I go to these conferences, and I’m going to be in a moment of doubt [when] the market is crashing for crypto,” said Dave Balter, managing director of Flipside Crypto, who was in Austin last week. “Then I run to these people and I think they’re not wrong.”

He talks about the industry’s longer-term promise. Balter believes the underlying blockchain technology of crypto has the potential to transform the way all financial transactions are conducted, and that’s what keeps him optimistic despite the sobering market.

He thinks the potential of technology to make traditional banking more efficient, for example, “gets mixed up with this political issue of harm to investors.”

Dave Balter, CEO of Flipside Crypto, believes that the underlying blockchain technology of crypto has the potential to transform the way all financial transactions are conducted.Erin Clark/Globe Staff

Among those who advocate for blockchain technology is Massachusetts State Representative Kate Lipper-Garabedian. Although digital currencies are the most well-known application, she said, there are several others. She is trying to create a state commission on blockchain and cryptocurrency, which would offer recommendations to the Legislature on how to use the technology and support the local business ecosystem.

“I don’t see the state’s interest in pursuing the value of blockchain diminishing due to the volatility in the digital asset market,” she said in an email to The Globe.

The state announcement a nearly $2 million grant on Wednesday to fund a partnership between Quincy-based incubator QUBIC Labs and Boston-based Algorand to support blockchain startups and entrepreneurs.

But local players admit the slowdown will be painful for individual investors losing money or startups forced to lay off workers.

Travis Lowry, a partner at Vinyl Capital in Boston, said the the so-called crypto winter is likely to be “quite disruptive,” especially for projects and companies that have failed to come up with useful or practical applications. But as an investor, he’s optimistic because “the hype and the scum will explode.”

“We’re probably going to have a lot of big drug companies in three to seven years coming out of space,” Lowry said. “There will probably be a lot of really public pain as well.”

White said crypto companies that don’t issue tokens or rely on crypto funds could weather the storm better than others, although any business related to the industry could be harmed.

“Longer-term success kind of depends on whether or not this downturn also leads to a cooling of venture capital interest in crypto and blockchain,” she said. “I wouldn’t be surprised if this affected any of the companies in Boston, but I would also say that the companies I’m most concerned about are not the Boston-based ones.”

Eyhab Aejaz, co-founder and managing director of Boston-based Breach Insurance, a cryptocurrency-focused insurance tech startup, said he thought the recent crash would be “painful for most founders and investors.” short term. But he thinks it’s a significant “reset” that will allow the industry to “refocus on building products and businesses that will help bring crypto to the masses.”

Still, he said the crash was already making business more difficult.

“Does it affect us? Yeah, it’s really hard to fundraise and do partnerships,” Aejaz said.


Anissa Gardizy can be reached at [email protected] Follow her on Twitter @anissagardizy8 and on Instagram @anissagardizy.journalism.

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