Crypto Update 6/23/22 | The Crypto Industry Is Still Embryonic - Transcripts

June 23, 2022

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With bitcoin trading flat, while Polygon's MATIC surges, plus a look at where an official from the World Economic Forum thinks we are in crypto's adoption cycle, CoinDesk’s “Markets Daily” is back with the latest news roundup.

Transcript

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group. It's thursday june 23rd 2022. And this is Markets daily from coindesk. I'm adam Levine here again with Adrian blustery daily news roundup on today's show we're talking Bitcoin traditional markets and where an official from the world economic forum thinks we are on Kryptos adoption cycle and just a reminder that coindesk is a news source and does not provide investment advice. Mhm. Bitcoin and ether have been trading roughly flat over the last 24 hours, dipping below 20 K per Btc and $1100 per each yesterday afternoon. But gaining ground back above overnight where it remains this morning. All coins had a far more interesting run outperforming the two top tokens in recent trading with Matic adam and affects all gaining ground. After a couple of choppy days, polygons token maddock in particular rally 25% on the day after a series of announcements and product launches on Wednesday. The second layer protocol announced the launch of polygon I. D. Integration polygon idea is a self sovereign identity solution powered by ZK cryptography that brings huge potential for DAO governance according to the company.

The protocol has also recently claimed to have achieved a major milestone towards carbon neutrality for the protocol which some analysts suggest could be contributing to the price uptick. The protocol's token has been trading in an upward trajectory over the past seven days. Some analysts are also attributing the recent rally to a few weeks of whale accumulation on chain data providers santa and tweeted that sharks and whales holding maddock have been in a large accumulation trend for the last six weeks quote. The tears of holders ranging from 10,000 to 10 million coins held have collectively added 8.7% more to their bags in this time span. The company tweeted. Meanwhile Matthew Dibb, C. 00. And co founder of stack funds told us that rallies for Matic adam and Alex have all been held up on low volume quote because of this. We expect that any decent drop in equities will lead to a selloff adults end quote. He also noted that Bitcoin dominance or B. T. C.

D. Has dropped considerably in the past few days from its high at 48% did explain this is because there's been relative strength in ether as well as light coin versus Bitcoin which has led to BtC dominance losing some ground quote. Our expectation is that should have further selloff occur. We'll see Bitcoin dominance continue to head north to short term highs. At a dib continuing. We see this as a temporary situation end quote more broadly investors once again shied away from riskier assets while digesting the latest inflation remarks from Federal Reserve Chairman Jerome Powell who testified to the Senate banking committee that the U. S. Might not avert a recession as the Fed continues to rapidly reverse. Extraordinarily supportive monetary policy put in place several years ago in separate commentaries. The ceo of deutsche bank and analysts from Citigroup predicted a 50% likelihood of recession. Fed. Critics have maintained that the central bank waited too long to boost its core interest rates, forcing it to adopt the harsh measures that seem likely to spur economic contraction quote.

It would have been better if the Fed took transient inflation seriously earlier this year instead of downplaying it. Mark Laurie, ceo of crypto software providers, shipyard software wrote, continuing, but at this point the Fed is doing the right thing by raising interest rates, inflation is public enemy number one. The downside is that it's too late now to do so painlessly. And Powell is likely again downplaying the risk of recession. It's probably already here. This bodes poorly for crypto short term end quote. Today's crypto coverage comes courtesy of coindesk markets analysts little load asthma and Bitcoin is currently trading at $20,438. That's down three quarters of a percent in the last 24 hours while ether is trading at $1108. That's up by about the same amount in the same time period according to the coindesk price index. In traditional markets. Let's take a step back and recap a bit of yesterday's testimony. Federal Reserve Chair jerome Powell told Congress that the U.

S. Central bank must go ahead and keep raising interest rates to get inflation down, even if it means that the economy faces higher unemployment and a potential recession During a hearing before the Senate Banking committee on Wednesday, Powell said that a soft landing is quote going to be very challenging and that recession is quote certainly a possibility. It seems the US Central Bank chief is slowly but surely shifting his public statements towards what the contrarians have been saying all along at the hearing. Senator john Kennedy, a republican from Louisiana called pal the most powerful man in the world right now. Three senators including Cynthia lummis, a Republican from Wyoming, Senator Kirsten cinema, a democrat from Arizona and Senator Sherrod Brown, a democrat from Ohio. Each challenge power with questions on crypto, specifically regulation, accounting, treatment of digital assets and the current crash in the crypto market quote, we're tracking those events very carefully said pal but the central bank is quote not really seeing significant macroeconomic implications so far and quote, He also repeatedly highlighted that there's need for a better regulatory framework for crypto, interestingly. U. S. Stock futures gained ahead of a second day from Powell's testimony, future started the S and P 500 added 7/10 of 1% on thursday future started the S. And P. 500 added 7/10 of 1%. In early morning trading futures for the tech focused NASDAQ 100 rose just under 1% while contracts tied to the dow jones industrial average edged up just over half a point Overseas, the Pan Continental stocks, Europe 600 was roughly flat.

While in London, the ftse 100 fell by 3/10 of a point in Germany. The dax fell more 1.1%. Surveys released on thursday showed that europe's economy slowed sharply in june as soaring consumer prices undercut demand for a range of goods and services. Continuing on our world tour. Asia's stock markets mostly rose in Hong kong the hang seng index rose by 1.3% while mainland china's shanghai composite rose by 1.6%. In Japan, the Nikkei 2 to 5 traded basically flat, just up 1/10 of 1%. Today's traditional markets coverage draws from the Wall Street journal coindesk and CNN stay tuned for after the break for an interview with the world Economic forum Leader on crypto back in a minute

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Today's featured story is an opinion piece for coindesk Snick day. Today's feature is entitled crypto Industry is still embryonic World Economic forum. Finance lead says Nick begins the piece. I spoke recently with Matthew Blake who looks at the future of finance, among other things at the world Economic forum on the industry's prominence during this year's meeting and here's why it matters. Kryptos role at the annual meeting was a signal of sort the industry's presence was loud visible and intended to say, hey, we're here from the moment you stepped off the plane in Zurich, Matthew blake, the head of the future of financial and monetary systems spoke to me about what he's seen from the industry this year and how he sees industry engagement moving forward. This interview has been edited for clarity question. Thank you so much for joining us. So let me set the stage, there have been a number of crypto panels here at the forum and if you walk outside the promenade, you can't walk more than 50 ft without seeing another crypto company but I really want to get your sense of is this a lot of engagement relative to past years? And are these companies engaging with the actual form itself? Is there productive conversation answer? Yeah, I appreciate the question. I think it's a story of industry maturation at its core, we've had engagement with the crypto industry as it's evolved and obviously it's still embryonic in many ways and we look to it and look forward to future growth with them.

I think the platform of the World Economic Forum, we're working very closely with these companies across a number of initiatives that we have ongoing. We have a team dedicated to Blockchain and digital assets based out of SAn Francisco. I think we've seen great growth there, there's a real appetite for the type of neutral platform, multi stakeholder conversations that the forum can bring to that industry. They're looking to certainly engage with policymakers, academics and members of civil society as they further refine and formulate and design protocols in their approach to socio economic issues. Question as you said, we've seen a lot of these conversations have been in the form itself. There have been conversations about Kryptos carbon impact and about central bank digital currencies? How do you see these conversations evolving in the years ahead. Are there specific topics or issues you really want to see highlighted during these panels answer, we're not a static organization and in essence I would if I can make a prediction, I think we'll see an increasing appetite to have crypto related topics on the agenda. We're building toward that trajectory this year. I think we have an amazing selection of topics, there's great familiarity but for a lot of folks there's a long learning curve, right? And there's such great innovation overall that that curve is pretty steep. So what we're trying to do is help the industry and also help our stakeholders were at large understand better the nuances of crypto.

I think I'm sure you can appreciate oftentimes how crypto is portrayed in media or common knowledge is really focused on just certain dynamics. Not the whole picture. We're trying to do justice to the whole picture. We're not there yet, but we're doing it in a segmented way and I think an evolutionary way. And so the bottom line is we seem more to come of this question in terms of crypto itself. Just looking at your experience at the economic forum and what you've seen over the years, what do you make of it? Do you think it's meeting the goals that set up for itself or what needs to happen for it to become kind of a global payment system. Answer, I think there's a tremendous amount of potential there. We've studied various aspects of Blockchain technology in the context of capital markets, we've done a good amount of work on that front over the years these days, we're looking at really the nexus of crypto and E. S. G, or environmental, social and governance. Actually, a collaboration with you guys coindesk on Cisa, which is the crypto impact and sustainability accelerator, which is really all about the nexus of E S.

G. And crypto. We also have a piece of work that's looking at the macroeconomic implications of broader crypto adoption. It's a really hot topic for us, for the industry, but also for policymakers. So we're contributing to those discussions globally. I feel like our work is really interesting and there will be aspects that we look to grow. I think it's very fair to say, as an institution, we're investing in this space over time, our energy and our commitment and I think we're seeing the interest reciprocated from the industry itself as they increasingly look to the forum as a way for them to further hone in how they engage with society and the meaningful role the sector can play in creating jobs and deal with some challenging socio economic issues. Question, unpacking that a little bit. On the regulator front, we've spoken about crypto industry engagement, have regulators been interested in engaging with the industry or the forum on the crypto issue as well answer Yes, we are everything that we do from a thematic and research basis has a multi stakeholder property to it, that's kind of core to how we operate and the answer is absolutely, I think one of the key areas where you've seen keen interest from central banks around the world is on central bank digital currency basis. We've also seen in the regulatory component that I mentioned a moment ago. We're doing interviews around the world with members of parliament, the central bank authorities, ministers of finance and so on. I think there's a combination of trying to understand the evolution of the space and stay on top of it.

If you take a step back and put yourself in the policymakers shoes, those are tough shoes to fill because on one hand, they have a mandate for maintaining financial stability and protecting customers. That's a big job. And on the other hand, they have really a sort of economic view toward the benefits of innovation and striking the balance between when to intervene and when to let things go. The forum, I think is very well situated because we can help in socializing and educating folks across the board the concerns of policymakers vis a vis the crypto industry and vice versa. It's very symbiotic in that way. That's really the type of work that we tried to do. That's the type of platform we try to provide. I think we're having success with that question. One of those concerns that you mentioned was climate and carbon impacts, going back to what you said earlier about cisa how do you see that evolving answer? You can sense the debate and a bit of the ferocity of the debate around steak versus proof of work, but also I think it came through a theme that I keep repeating here, which is that as human beings we focus on the here and now, but this is very much an evolving story, different consensus mechanisms, what we have and what we're proving is what we're aware of today. Three years, five years, 10 years down the line, most likely that there will be many more. I think the key answer there is the environmental concern is real.

We are again, as an institution working with 100 and 80 different sectors, we're working with many of the hard to abate sectors. So aviation, automotive, chemicals, steel, just as an example right on transition paths right towards net zero? I wouldn't want to just pigeonholed the crypto industry, They have their challenges. I think if I could say something positive there, it's that it's still an embryonic sector, they're very aware of this issue and I think that bodes well for them to adapt in a very sensitive way vis a vis the environment in a way that other sectors who have more legacy kind of baggage and just history. It's just more challenging. And the final question, what do you see as the next steps, what do you want to see maybe a year from now or at the next economic forum, What do you hope to see related to cisa or just crypto in general answer? I think this year we're still on a level setting stage. We're trying to bring to the participants here in agenda that's both rich but balanced as it relates to the technical nuances of the crypto space, to those that aren't steeped in it. It's a technical space, right? It's got its own lexicon. It's changing rapidly. We're very mindful of putting the pieces in place in a way where it's accessible.

I think that benefits the whole industry. If I can be quite frank, I think jargon and sort of being focused on the nuances is inaccessible. Most folks are not technologists. So we have to sort of set the stage there to answer your question. I see us working towards more granularity. So going deeper into the nuances, drawing distinctions between different pieces of the ecosystem and really taking the membership base and also our participants here at the annual meeting along for the journey And that's not just in this environment. That's 365 days a year. We're doing that tactically as a team and as an institution and that's our show for today. Thank you so much for listening. This episode is edited by Adrian Blust and we'll be back tomorrow with another news roundup and just a reminder that coindesk is a new source and does not provide investment advice

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